Assessment Procedure for Senior and Persons with a Disabled Property Tax Exemption

Goal

To provide direction and information on the property tax exemption for residential units that are built or altered to accommodate a senior or a person with a disability.

Note: This procedure has been developed to provide the public with a general understanding of the assessment procedure for this property tax exemption. The applicable law prevails to the extent there is any conflict between this 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  a person with a disability resides.

The property tax exemption applies to:

  • Any increase in value as a result of changes made to an existing residential unit after May 15, 1984 to accommodate a senior (age 65 or older) or a person with a disability.
  • Up to10 percent of the assessed value of a new residential unit constructed to provide accommodation for a senior or a person with a disability.
  • A garden suite, as defined in the Planning Act.

Alterations, Improvements and/or Additions to an Existing Residential Unit

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

  • The person must be a senior (age 65 or older) or a person with a disability, and who would, but for the accommodations or improved facilities provided, have to live in other premises where on-site care would be provided to the person.
  • The senior or person with a disability must reside in the premises as their personal residence.
  • The property must be in the residential property class and must not have more than three residential units.
  • The person occupying the property where the senior or person with a disability resides, must not be in the business of offering care to seniors or persons with a disability.
  • The alterations, improvements or additions were made after May 15, 1984.
  • The property owner applies to MPAC for the property tax exemption and the exemption is approved by MPAC.

The home improvements that qualify are any addition, improvement or changes that specifically relate to the needs of the senior or person with a disability residing there. These changes must also increase the assessed value of the home and may include such things as 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 accommodation to a senior or a person with a disability is exempt from property taxation. Approved exemptions remain in place only for as long as the senior or person with a disability resides in the premises as their personal residence.

New Residential Unit

New residential units constructed to provide accommodation for a senior or a person with a disability, who but for the accommodations or improved facilities provided, would have to live in other premises where on-site care would be provided, may be eligible for a partial property tax exemption of up to 10 per of the assessment of the new residential unit. This exemption recognizes that custom features to accommodate a senior or a person with a disability may require a larger floor area than would otherwise be included. The partial exemption for new homes takes into account this additional floor area as well as modifications such as wider doorways, wider hallways etc.

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

  • The person must be a senior or a person with a disability who would, but for the accommodations or improved facilities provided, have to live in other premises where on-site care would be provided to the person.
  • The senior or person with a disability must reside in the premises as their personal residence.
  • The property must be in the residential property class and must not have more than three residential units.
  • The person occupying the property where the senior or person with a disability resides, must not be in the business of offering care to seniors or persons with a disability.
  • The property owner applies to MPAC for the property tax exemption and the exemption is approved by MPAC.

Garden Suite

In 2008, the province introduced a new property tax exemption for garden suites; this 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 senior of at least 65 years of age.
  • The property owner must also have their personal residence on the land and is a family member of the senior or person with a disability.

Procedure

Step 1 – Property owner informs MPAC:
The property owner informs MPAC that a residential unit has been built or modified to provide accommodation for a senior or a person with a disability or a garden suite has been erected.

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

Step 3 – Property owner must complete affidavit:
The owner of the property seeking the property 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 the portion recognized as exempt.

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 person with a disability no longer resides on the property.

If MPAC had assessed the residential unit as entirely taxable for the current or prior taxation years, and the property 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 alteration, improvement or addition, and then another value after the alteration, 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 Residential Unit

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 person with a disability. 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 includes 10 acres of land with a house, attached garage and 1,000 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 person with a disability 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 Suites

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 person with a disability resides in the garden suite as their 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

Related Information

Senior/Disabled letter of verification English version

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.