Thursday 19 February 1998

Assessments shock homeowners

Two million expected to appeal revised Ontario property values

Dawn Walton
The Ottawa Citizen

As many as two million Ontario homeowners -- including tens of thousands in Ottawa-Carleton -- are expected to appeal property value assessments they received this week.

The assessments could mean major tax increases for many of those homeowners.

The Ottawa-Carleton Regional Assessment Office, the provincial agency that pegs the value of all local houses for tax purposes, received 1,200 calls on Tuesday alone from homeowners shocked by their assessment.

Alex Wloch of Gloucester says he just about went through the roof when he received a notice that his property has been valued about 20 per cent higher than his last assessment. The value of his three-bedroom home on Little Road had jumped to $275,000 from $225,000 without him having made any improvements to it.

"We don't have any services around here," he said. "We don't have curbs. We don't have sidewalks. No streetlights. It's semi-rural. We're paying an outrageous amount, it seems, for something we don't have."

But provincial officials and local municipalities advise property owners not to panic -- yet. They say that just because you've been notified that your property has been assessed upward, it doesn't automatically mean your property taxes will skyrocket. Similarly, a downward assessment won't necessarily translate into a tax break.

"It's hard to judge at this stage what impact this will have on taxes. There are a lot of decisions yet to be made by the upper-tier and lower-tier municipalities," said Harvey Sasseville, the province's assessment commissioner for Ottawa-Carleton.

City of Ottawa treasurer Mona Monkman says the amount of tax paid on the assessed value of a home hinges on a mill rate that won't be set before May. "Unfortunately we've only been given one piece of this puzzle," she said.

That hasn't stopped hordes of homeowners from registering their objections to what they see as inflated estimates of the value of their homes.

"We're not going to hear from those we've reassessed for less," notes Mr. Sasseville.

"But we'll hear from those people that we've reassessed at a higher figure than what they've paid for their property, perhaps in 1996."

That latter category includes about two million of the total 3.8 million properties in Ontario. And, not coincidentally, the province has estimated that the owners of as many as two million properties will appeal their higher assessment.

The changes stem from a recent overhaul of the property assessment process in Ontario.

During the past 18 months, provincial assessors have been trying to determine the fair market value of properties as if they were sold by a willing vendor to a willing purchaser as of June 30, 1996.

Ottawa has been on a market value system as of 1988, but before a recent round of amendments, Ontario's Assessment Act only demanded that the assessment was consistent with similar houses in the same neighbourhood without necessarily proving the assessment was exact.

The purpose of the new scheme is to give the province a more stable assessment base. After this most recent assessment, there will be another in 2001 that will last for two years, after which assessments will be done annually.

To determine the amount of property taxes, the current property value assessment is multiplied by the municipality's tax rate. While property value assessment notices were sent out Feb. 11, many municipalities have yet to set the tax rate. Ms. Monkman says Ottawa Council has directed staff to aim for a tax freeze.

Regardless of the new property tax regime in the province, many people such as Mr. Wloch believe their assessment must be a mistake and are poised to appeal.

"There's always room for error," says Allison Erickson, president of Capital Property Tax Consultants of Ottawa. "That's why there's the assessment appeals process."

In the Ottawa-Carleton region, there are only about 60 assessment officers who are responsible for determining the market value on 223,000 residential and commercial properties.

"The value is arrived at by analysing (real estate) sales," says Mr. Sasseville. "It's an average of sale prices so it doesn't in every case reflect the selling price that a person might have paid in that particular month. We're doing mass appraisals so we're looking at sales in the vicinity and comparable properties and coming up with the average selling price of similar type properties."

Properties were last reassessed in Ottawa-Carleton in 1992 for the 1993 taxation year. At that time the values were based on 1988 market values.

"When you're doing it on a mass system there's always going to be properties that are over-assessed or under-assessed," said Ms. Erickson, whose company offers to re-assess a homeowners' assessment, for a fee.

If you think your assessment is inaccurate, there are several things you can do.

- First, consider what you think your property was worth as of June 1996. If you think the assessments don't match, contact the local provincial assessment office (526-3890 or 1-800-465-2495 or fax 526-3319) to discuss your property with an assessment officer. The initial call is free and if the assessed value is deemed incorrect you will be issued an amended notice.

- The Ottawa-Carleton Regional Assessment Office is also holding a series of information sessions throughout the region to offer general advice to homeowners and to respond to specific complaints.

- You can also contact an independent firm for professional help to discuss your concerns with the local assessor. The firm should inspect your property and evaluate the market value of your property as of June 30, 1996, and compare it with similar properties. The company should also check that the property has been correctly classified and conduct a review of the assessment office's records.

- If you're still not satisfied, any property owner has until June 29 to appeal to an independent tribunal of the Ministry of the Attorney General, called the Assessment Review Board. There's a $20 filing fee for residential property owners and a $50 fee for commercial property owners, after which a hearing date will be set. The professional assessor can represent you at this hearing. Most cases will be settled at the tribunal, but if there is a matter of law to be argued the case can go on to provincial court.

Property owners should be warned, however, that appealing their assessment poses some risk that a subsequent investigation could determine the original assessment was, if fact, too low.

"It doesn't happen too often," says Mr. Sasseville. "But that risk is always there. If we've missed something, like we discover a home has air conditioning or a finished basement, we're in the unfortunate predicament of telling them the value has to be adjusted upwards."

But Mr. Sasseville says he "wouldn't discourage anyone" from appealing their assessment if they believe it's too high.

Mr. Wloch, for one, is planning an appeal, but wonders if the entire overhaul to the assessment system is worthwhile at all.

"Why, in a sense, are we going through an assessment that is creating as much problems with more bureaucracy."