The corporation overseeing Ontario's property assessment system says its process is "transparent and fair," amidst calls for an independent review.
The Municipal Property Assessment Corporation (MPAC) says it has had a number of third-party evaluators, including the International Property Tax Institute, the International Association of Assessing Officers, and the Office of the Quality Service Commissioner, conduct "extensive reviews" of its process.
"Their reports have been clear that MPAC’s process is both transparent and fair," the corporation told STOREYS.
"We recognize that for many people in Ontario, their property is their single biggest asset, and so the assessed value of their property is a big deal. We know we need to get it right because we know what is at stake for Ontario property owners."
MPAC has come under fire in recent days after a Toronto Star investigation found that it tended to assess cheaper homes at higher values than their sale prices, and pricey properties at lower values than their sale prices. In an email to STOREYS, MPAC accused the story of "misleading" property owners on the "quality and accuracy" of their assessment.
A March 2022 vertical equity review conducted by the aforementioned Quality Service Commissioner -- an impartial body appointed by MPAC's Board of Directors -- found a "mild tendency towards regressivity" in property assessments. However, given the magnitude of the review, the finding was "typical," and ultimately raised "no concern of systemic vertical inequity in residential assessments in Ontario."
Regressivity means that as market values increase, property owners are assessed at proportionately lower levels. In contract, progressivity occurs when homeowners are assed at proportionately higher levels when market values increase. The implication of the former is that owners with the least ability to pay, such as those with lower valued homes, carry a heavier tax burden.
To improve the issue, the Commissioner's review recommended "prioritizing the sales of properties at the lower and higher extremes of the market for review and vetting by valuation staff."
MPAC is supposed to complete an Ontario-wide property assessment update every four years. However, due to the onset of the pandemic, the 2020 assessment update was postponed.
In an effort to "maintain stability for taxpayers and municipalities," the provincial government postponed the assessment again in November 2021, as part of the Ontario Economic Outlook and Fiscal Review.
As such, property assessments for the 2023 property tax year continue to be based on assessed values as of January 1, 2016.
During an unrelated appearance on July 10, Toronto Mayor-elect Olivia Chow said MPAC must ensure that "everybody pays their fair share." Chow has proposed raising the city's Vacant Home Tax as well as the Municipal Land Transfer Tax on luxury properties.
"We are always eager to work with Toronto mayor-elect Olivia Chow, municipal partners, and other stakeholders to provide information on how our processes work to ensure that properties are assessed fairly and equitably," MPAC told STOREYS.
"Our focus is on getting it right for Ontario property owners."
