2012 Assessment Update: Municipal Discount Factors and Provincial Discount Factors
Municipal Discount Factors and Provincial Land Discount Factors are one of a number of methodologies used in the recalculation of phased-in assessments. The factors are used to ensure the phase-in for that property represents only the market increase. They are calculated for each property class, in each municipality.
Factors for the 2012 assessment update
Municipal Discount Factors (MDFs)/Provincial Land Discount Factors (PLDFs) are one of a number of methodologies used in recalculating phased-in assessments.
- Learn more about phased-in assessments here.
MDFs represent a standardized market shift between assessment updates for every tax class in the entire municipality. They are not specific to neighbourhoods, building types, etc., but represent the market shift in the municipality as a whole by a tax class.
- For example, the market shift for the residential tax class in a municipality between the 2008 assessment update and 2012 assessment update was an increase of 20%. The MDF for the 2012 assessment update would be 0.80.
MDFs are used in specific instances (see below) when an applicable change occurs to the property.
- As property taxes are based on what the current property’s classification and value are, the historical value of the property prior to the change event would no longer apply and a ‘new historical’ value to capture the new/changed property must be created in order to calculate a new phase-in stream for the property.
- The MDFs create this ‘new historical’ value by applying the factor, which represents the standardized market increase for the property’s tax class between assessment updates, to the new/changed property value.
- The ‘new historical’ value is an estimate of what the new/changed property would have been worth in the previous assessment update. The ‘new historical’ value is then phased-in over the four-year period.
- A vacant piece of property is valued at $100,000 in 2012.
- A new home is built on the property in 2013 and the new value for the property is $200,000.
- The MDF for the residential tax class in the municipality is 0.80.
- The MDF is applied to the new home by multiplying the new $200,000 value by the factor of 0.80, and a ‘new historical’ value for the new home of $160,000 is created (an estimate of the value of the new home on that property in the previous assessment update in 2008).
- The difference between the two assessments of $40,000 is phased-in over the four-year taxation period (2013–2016) between the ‘new historical’ value of $160,000 and the new current value of $200,000.
When these discount factors are applied
MDFs/PLDFs are used when specific changes to a property occur, such as:
- Vacant land is improved by a new building or structure.
- Land becomes, or ceases to be, exempt from taxation.
- Land is subdivided.
- New units are created by a condominium plan.
- The land is reclassified (for example from the residential to commercial class).
The difference between the municipal and provincial discount factors
- MDFs (Municipal Discount Factors) are used for properties governed by a municipality.
- PLDFs (Provincial Land Discount Factors) are used for unincorporated land:
- Land is not governed by a municipality.
- Taxes are paid directly to the province.
- Usually areas of wilderness far outside any municipality.
The 2012 assessment update
The 2012 assessment update is valid for the property tax years 2013–2016.
- For the 2013–2016 property tax years, any increase is calculated between the January 1, 2008 valuation date and the January 1, 2012 valuation date.
|1 - Prescott, Russell, Stormont Dundas & Glengarry Counties|
|2 - Lanark, Leeds & Grenville Counties|
|3 - Regional Municipality of the City of Ottawa|
|4 - Renfrew County|
|5 - Frontenac, Lennox & Addington Counties|
|6 - Hastings, Northumberland, City of Prince Edward Counties|
|7 - Peterborough County, Kawartha Lakes County, Haliburton County|
|9 - City of Toronto|
|13 - Regional Municipality of Durham|
|14 - Regional Municipality of York|
|15 - Regional Municipalities of Halton and Peel|
|16 - Simcoe County|
|17 - District Municipality of Muskoka|
|18 - Regional Municipality of Niagara|
|19 - Regional Municipality of Hamilton|
|20 - City of Brantford, Brant, Haldimand County and Norfolk Counties|
|21 - Regional Municipality of Waterloo, the Counties of Dufferin and Wellington, and the City of Guelph|
|23 - Elgin, Middlesex and Oxford Counties|
|24 - Huron and Perth Counties|
|25 - Bruce and Grey Counties|
|26 - Municipality of Chatham-Kent, Lambton County|
|27 - Essex County|
|28 - Territorial Districts of Nipissing and Parry Sound|
|29 - Territorial Districts of Cochrane and Timiskaming|
|30 - Regional Municipality of Sudbury and the Territorial Districts of Sudbury and Manitoulin|
|31 - Territorial District of Algoma|
|32 - Territorials District of Kenora, Rainy River and Thunder Bay|