Assessment Procedure for Senior or Disabled Property Tax Relief in Ontario

Goal

To provide direction and information on Property Tax Relief for homes that are built or modified to accommodate seniors and/or persons with disabilities.

Note: This procedure has been developed to provide the public with a general understanding of the assessment procedures for senior and disabled property tax relief. The applicable law prevails to the extent there is any conflict between the procedure and the relevant law.

Eligibility

Section 3(1)22 and 3(1)22.1 of the Assessment Act and section 45.2 of Ontario Regulation 282/98 provide a tax exemption for a portion of a residential property where a senior or disabled person is living.

The exemption applies to:

  • Any increase in value as a result of changes made to the existing home after May 15, 1984 to accommodate an eligible senior or disabled person
  • or, -10 percent of the assessed value of a new home that is built to provide housing for the eligible senior or disabled person
  • or, a garden suite, as defined in the Planning Act

Alterations, Improvements and/or Additions to an Existing Home

To qualify for the exemption, the following conditions must be met:

  • The person must be at least 65 years old or have a disability, and in both cases, would otherwise have to live in other premises that provide on-site care.
  • The senior or disabled person must live in the home as his/her personal residence.
  • The property must be in the residential property class and must not have more than three residential units.
  • The property owner must not be in the business of offering care to senior or disabled persons.
  • The alterations, improvements or additions were made after May 15, 1984.
  • The property owner applies to MPAC for the exemption.

The home improvements that qualify are any addition, improvement or changes that are specifically related to the needs of the disabled or senior resident.  These changes must also increase the assessed value of the home. They may include such features as special bathroom alterations, kitchen alterations or additions to an existing home.

Only the assessed value of the alterations, improvements or additions constructed for the purpose of providing housing is exempt from property taxation. This is in place only for as long as the senior or disabled person lives in the home as his/her personal residence.

New Home

Property owners who have built a new home to provide a place to live for a senior or a person with a disability can get partial property tax exemption of 10 per cent of the value of their home.  This exemption recognizes that custom features included in a home to accommodate a senior or a person with a disability require a larger area than would otherwise be included in a home. The partial exemption for new custom-built homes takes into account the additional floor area and other modifications these homes need to care for and provide a place to live for the persons with special needs. These may include wider doorways/hallways or larger rooms to provide wheelchair users with more space.

To qualify for the exemption, the following conditions must be met:

  • The person must be at least 65 years old or have a disability, and in both cases, would otherwise have to live in other premises that provide on-site care.
  • The senior or disabled person must live in the home as his/her personal residence.
  • The property must be in the residential property class and must not have more than three residential units.
  • The property owner must not be in the business of offering care to senior or disabled persons.
  • The property owner applies to MPAC for the exemption.

Garden Suites

In 2008, the province introduced a new exemption for garden suites.  This exemption applies for 2005 and subsequent taxation years.

To qualify for the exemption, the following conditions must be met:

  • The garden suite must be a one-unit detached residential structure containing bathroom and kitchen facilities that is ancillary to an existing residential structure.
  • The structure is temporary and is designed to be portable.
  • The garden suite is used as the personal residence of a person who is at least 65 years of age.
  • The property owner must also have his or her personal residence on the land and is a family member of the senior or disabled person.

Process

Step 1 – Property owner informs MPAC:
Property taxpayer informs MPAC that their home has been built or modified to provide a place to live for a senior or disabled person or a garden suite has been erected.

Step 2 – MPAC reviews exemption details:
MPAC will verify the data is current and up-to-date and will determine if the property qualifies for the exemption.

Step 3 – Owner must complete affidavit:
The owner of the property seeking the tax exemption must complete an affidavit, provided by MPAC, which affirms that the property meets all of the legislated requirements to qualify for the exemption.

Step 4 – Exempt portion added to Assessment Roll:
The exempt portion is added to the assessment roll for the next taxation year and no taxes are charged against it.

If MPAC had assessed the home as entirely taxable for the current or prior taxation years, and the owner is now applying for the exemption, the owner should contact their municipality to see if they qualify to receive a tax rebate for the current taxation year.

The property assessment notice shows both the taxable assessment and the part that is exempt from assessment.

MPAC calculates the exempt portion as follows:

Alterations, Improvements and/or Additions to an Existing Home: MPAC puts a value on the property before the improvement or addition, and then another value after the improvement or addition. The dollar difference between these two figures will be the amount that is exempt from taxes. The exempt portion is added to the assessment for the next taxation year and no taxes are charged against it.

Example

New total value = $200,000

Old total value = $185,000

Taxable portion = $185,000

Exempt portion = $15,000

New Home: In arriving at the exempt value, the 10 per cent will normally apply to the whole assessment of the property. In cases where there is significant value on extra buildings, MPAC must decide whether or not the buildings are being used to help provide a home for the senior or disabled person. If extra buildings are not being used to help provide a home for the senior or the person with a disability, then those buildings are not included in the calculation.

For properties with large acreage, the 10 per cent exemption only applies to the residential building plus one acre of land. For example, if a property included 10 acres of land with a house, attached garage and 1000 square feet of storage shed and only 1 acre of land, the house and garage are used to provide a home for a senior or disabled person. The shed and 9 acres of land are not used for residential purposes, and therefore, not included in the calculation.

Example

Total assessment = $200,000

Assessment of 1 acre plus house and garage = $160,000

Exempt portion - 10% of $160,000 = $16,000

Taxable portion = $184,000

Exempt portion = 16,000

Garden Suite: Only the assessed value of the temporary structure constructed for the above noted purpose is exempt from property taxation. This is in place for only as long as the senior or disabled person resides in the home as his/her personal residence.

Example

New total value with garden suite= $200,000

Old total value = $185,000

Taxable portion = $185,000

Exempt portion – value of garden suite= $15,000

Step 5 – Property owner receives confirmation letter:
MPAC sends letters to the affected property owners to ensure the property is still eligible for the tax exempt portion in their assessment. MPAC will remove the tax exemption if the letter confirming that the property still qualifies is not returned, or if the senior or disabled person no longer resides on the property.

Related Information

Senior/Disabled letter of verification English version

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Note: The applicable law prevails to the extent there is any conflict between this information and the current law. This information is not intended to provide legal advice and should not be relied upon as such.