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APPEAL & CORRECTION PROCESS THE ASSESSMENT ACT & THE MUNICIPAL ACT, 2001 Jack A. Walker, Q.C. International Property Tax Institute Workshop February 24, 2011


APPEAL & CORRECTION PROCESS Assessment Act and the Municipal Act 2001 constitute a code for the assessment and taxation of real property in Ontario • Separate but interrelated • Independent but dependent • Historical connection • Intention is that all of the relief and appeal provisions are intended to be contained within the 4 corners of those Acts Problem: The legislation has been amended and drafted in a knee jerk, stop gap manner rather than from an overall perspective with a view to simplifying the process, ensuring equity for all of the parties, and properly co-ordinating the inter related portions.


SCHEME OF ASSESSMENT AND TAXATION Succeeding Taxation Years

December preceding taxation year - Corrections made under s.32(1) - 2nd Tuesday in December roll returned (s.36) state and condition as of date of return of the roll, classification day June 30 (s.19.3)

Taxation Year

January 1st of the Taxation Year

-Municipality prepares tax roll (s.340.1 Municipal Act) and collects taxes on it -Assessment Act alterations s. 32(1.1), s.33, s.34, s.40, s.40.1, s.43, s.44, s.46, s.50 of Reg. 282/98 -Tax roll only changed by changes made under Assessment Act (s.341) and Municipal Act s.359(12)

End of Taxation Year

Rebate or increase in taxes – Municipal Act s.357, s. 358, s.359, s. 359.1, and s. 364

-S.32(1) omitted 2 years -S.40.1 palpable error


SPECIFICS Assessment Act: Section 32 (p. 1) Corrections in Assessment Roll a) b) c) d) e)

Before year end Factual corrections Change in regulations resulting in classifications change Property becomes exempt because of change in regulations, etc. Methodology changed by regulations, etc.

(b)(c)(d) and (e) 2008 apply during the tax year. Known as “PRAN” S.33 (p. 3) – Omitted assessments discovered for tax year and either part or both of preceding 2 tax years. Properties ceasing to be exempt during the taxation year S. 34 (p. 4) – Supplementary assessments during the taxation year increase in value because of erection, alteration… that commences to be used for any purposes. During the taxation year a “change event” occurs.


Assessment Act Continued S.40 (p. 6)

– Appeal to ARB

S. 40.1 (p. 11)

– Correction of palpable errors - Assessment corporation becomes appellant - Time Limit? - Palpable = certain, obvious

S.43 (p. 11)

- Stated case to the Divisional Court -S.46(6) the judgment of the Superior Court is binding on the ARB and shall be followed by it - It is effective for calendar year forward but not backward

S.46 (p. 12)

– Application to Superior Court for the determination of any matter relating to the assessment

S. 50 Reg 282/98 (p. 13)

- Appeal to ARB with respect to the phased in assessment or classification


RIGHTS TO APPEAL S. 357 (p. 14):

rebate.

MUNICIPAL ACT

- Cancellation, reduction or refund of tax “may cancel, reduce or refund all or part of the taxes” - 7 subsections A - Amended 2007 (1.1) to exclude 1(g) if property is eligible for vacancy - Right of appeal to ARB - Decision of the ARB is final

S.358 (p.17): - Over charges – one or both of 2 years preceding the year in which the application is made. “Gross or manifest error in the preparation of the assessment roll clerical or factual in nature.” - Council to make a Decision before September 30 of the year following the year in which application is made - Within 14 days of the Decision, must notify the applicant - No appeal S.359 (p.19):

- Increase in taxes due to an undercharge caused by a gross or manifest error that is clerical or factual - Council meeting to make representation - Right to appeal to ARB - Decision of the ARB is final


Municipal Act Continued S.359.1 (p. 21):

- Error in calculating taxes under the capping claw back, etc. in the year the application made utilized an amount that should have been used - Prior to using the amount, must hold meeting of council where representations can be made - Serve right of appeal to ARB as exists under s.359 (5)(6)&(7) - Under s.359(11) ARB Decision is final, no mention of s.359(11) in s.359.1

S.364 (p.21):

- Vacant unit rebate - 120 days after the Municipality makes its decision on the rebate may apply to ARB - If Municipality fails to respond within 120 days, applicant may appeal to ARB - S.40 of Assessment Act applies to Appeal Process


RIGHT TO APPEAL

SECTION MUNICIPAL ACT

APPEAL PROCESS

S. 357 (Cancellation, reduction or refund) (p.14)

- -

Right of appeal to ARB Appeal is final to ARB

S. 358 (Overcharges due to gross or manifest error) (p.17)

- -

Council to make its Decision Nothing about an appeal but ss.12 allows delegation to ARB of council’s powers

S. 359 (undercharges due to gross or manifest error) (p.19)

- -

Right to appeal to the ARB Decision of ARB is final (ss.11)

S.359.1 (error in historic tax calculations)(p.21)

-

Right of appeal to ARB and s.359(5),(6)&(7), no mention of s.359(11) which makes Decision final

S. 364 (vacancy) (p.21)

-

Same right of appeal as under s.40 of the Assessment Act Right to go to Superior Court with leave on a question of law

-


ISSUES & OPPORTUNITIES ASSESSMENT ACT: 1. Appeals to ARB - S.33, 34, 40, 40.1, 50 Reg. 282/98 (a)Parties (i) Role of the Municipality and its participation (ii) Who are MPAC’s clients (iii) MPAC’s role provincially vis-a-vis local responsibility (b) Cost – no costs at ARB (c) Time table (d) Onus (i) Valuation (ii) Equity (e) Alternative Dispute Resolution – Rules of ARB (p.32) (f) Recent amendments to Rules of Civil Procedure and jurisprudence re: expert witnesses


2. S. 40.1

- Palpable error - Limitation on impact - Double edged sword

3. S.43

- Stated case - Possible utility - Present cluster board approach

4. S.46

- Application to Superior Court - Opportunity to obtain costs - Can be utilized for only question arising under the Act. I.e. interpretation “Fee simple, if unencumbered.� - Historically used for exemption issues, potential much greater - Changing landscape exemptions


MUNICIPAL ACT APPLICATIONS Time bomb waiting to be set off. Why? (a) Limitation periods SECTION s.357 (p.14)

TIME TABLE i.

By February 28th, succeeding year. Application to be filed but may be made by Treasurer by April 30th ii. On or before September 30th council must hold a meeting to determine issue iii. Within 14 days of Decision, Municipality must notify Applicants iv. Within 35 days of Decision, Applicant may appeal to ARB v. If no Decision by council by September 30th, Applicant may appeal to ARB by October 21st


SECTION

TIME TABLE

s. 358 (p.17)

i.

Application to be filed between March 1st & December 31st for one or both of two years preceding the year of application ii. MPAC must confirm an error in the assessment iii. By September 30th council shall hold meeting and make a decision iv. Within 14 days, shall notify Applicant

s. 359 (p.19)

i.

Application of Treasurer within year but under s.2.1, can be made by December 31st of the year following ii. Council makes Decision and within 14 days must notify owner iii. Within 35 days of date of Decision may appeal to ARB


SECTION

TIMETABLE

s.359.1 (p.21)

i.

Upon application of the Treasurer within the year in which the application is made ii. Council shall hold a meeting and make a decision iii. Within 14 days after making the decision, council shall notify person affected iv. Within 35 days of decision, may appeal to ARB

s. 364 (p.21)

Application to be filed by February 28th of following year ii. Reg 325/01 – if amount is issued under s.33, deadline is extended until 90 days after the date of assessment is mailed iii. After Municipality mails the decision, the Applicant has 120 days from receipt to appeal to ARB iv. If Municipality makes no decision, after 120 days Applicant may appeal to ARB i.



Appeal & Correction Process