Assessment Procedure for Supplementary and Omitted Assessments

Goal

To provide information on the MPAC's process of issuing supplementary and omitted assessments.

Background

Section 19(1) of the Assessment Act gives MPAC the mandate to assess property a t its current value. As part of this mandate, MPAC is required to maintain and update its records on a regular basis to ensure that all property is accurately assessed.

Section 33 of the Assessment Act authorizes MPAC to issue omitted assessments and section 34 of the Assessment Act authorizes MPAC to issue supplementary assessments.

Where improvements to a property have been made, MPAC will note the changes made and determine whether a supplementary or omitted assessment should be issued to increase the assessed value of the property or change its classification.

If any additional assessment is added to the tax roll or the property classification has been changed, the property owner will receive a Notice of Supplementary Assessment or a Notice of Omitted Assessment, as appropriate. The Notice will contain the additional value which has been added to the tax roll. It will also indicate which property class the property has been assigned to.

Municipalities also receive this information via a supplementary assessment listing and an omitted assessment listing, which are delivered at various times throughout the year. Municipalities use this information to calculate any additional property taxes.

The following provides details on the circumstances that will generate a supplementary or omitted assessment.

Supplementary Assessment

A supplementary assessment may be issued to reflect increases in assessment that result from an improvement(s) to a property or a change in property classification (e.g., residential to commercial) that has occurred after regular notices of assessment have been mailed in the previous year and before the end of the current taxation year.

A supplementary assessment may also be issued for the following reasons:

  • a property or a portion of a property ceases to be exempt from taxation. This may occur due to a change in the use of a property or a change in property ownership. For instance, if a church is sold to a private individual who intends to use the property for residential purposes, the property no longer qualifies for a tax exemption and becomes taxable as of the sale date;
  • a property or a portion of a property ceases to be eligible for inclusion in the farm or managed forests property class or ceases to be conservation land; and
  • a property or a portion of a property ceases to be eligible for inclusion in the commercial or industrial vacant or excess land subclasses.

Supplementary assessments can also be issued for “change events” that result in a property becoming liable for taxation in a different property class. The Assessment Act defines a “change event” to include :

  • a change in the use of all or part of the property; or
  • an act or omission that results in all or part of the parcel of land ceasing to be in a property class.

Examples of change events include:

  • a change in the use of a property from industrial to commercial;
  • a property owner no longer qualifies for the managed forest or conservation land tax incentive program; or
  • a multi-residential apartment building is converted to a condominium property.

Omitted Assessment

An omitted assessment must be issued if any land that is liable to assessment has been omitted from the tax roll for the current taxation year and/or part or all of the two preceding taxation years. “Land” includes land, buildings, structures, fixtures and machinery.

An omitted assessment may also be issued to change the tax liability of a property from exempt to taxable or to change the classification of property which ceases to be eligible for the managed forests property class or ceases to be conservation land.

When an omitted assessment is issued, the municipality may levy additional property taxes for the current year and, if applicable, for all or part of the two previous taxation years.

An omitted assessment may be issued for the following reasons:

  • land, including buildings or structures, has been omitted from the tax roll;
  • property or a portion of a property is incorrectly shown on the assessment roll as exempt from taxation. For instance, if a school was sold to a private individual two years ago but the property continued to be shown on the tax roll as exempt, MPAC will be required to issue an omitted assessment to change the tax status of the property from exempt to taxable for the current year and the two preceding years, retroactive to the sale date; and
  • a property ceases to qualify for inclusion in either the managed forest or conservation land property classes under the Managed Forest Tax Incentive Program or the Conservation Land Tax Incentive Program.

An omitted assessment can only be issued for a classification change if:

Minimum Threshold

A supplementary or omitted assessment will only be issued if the value of a property is increased by 5% of its current property assessment, or by $10,000 or more. If a supplementary or omitted assessment is not issued because the threshold has not been met, the increase in assessment will be added as a year-end adjustment to the assessment roll for the following taxation year.

The Process

MPAC receives property information from various sources, including:

  • building permit lists and occupancy permits received from municipalities;
  • notification from property owners;
  • inspections of properties that have sold; or
  • neighbourhood inspection programs.

In response to this information, a representative from MPAC will visit the property to determine what changes have been made. If an inspection is necessary, the MPAC representative will:

  • produce proper identification;
  • measure and inspect the building, structure, or addition;
  • determine the date the improvement commenced to be used; and
  • perform a sales investigation, if the property recently sold.

After all the improvements have been noted, the property’s assessment will be recalculated to include all of the changes made to the property. A supplementary or omitted assessment will be issued as required, depending on whether the improvement commenced to be used in the current year or the previous taxation years.

Examples of Supplementary and Omitted Assessments

1. New House Built and Occupied During the Tax Year

A new house is built on a vacant lot and is completed and occupied on July 1, 2012. The property was shown on the assessment roll for the 2012 taxation year as vacant residential land. CVA stands for Current Value Assessment.

2008 CVA after update for new single-family dwelling $325,000
2008 CVA of vacant lot $178,000
2008 CVA of improvement $147,000

For the 2012 taxation year, a supplementary assessment for $147,000 attributable to the new house will be issued effective July 1, 2012.

2. An Addition Built on an Existing Home and Occupied in 2011

An addition was built and commenced to be used on October 12, 2011. The addition was assessed during the 2012 taxation year. It is determined that the addition increases the existing current value of the property by $40,000.

2008 CVA after addition has been added $440,000
2008 CVA of original house $400,000
2008 CVA of improvement $40,000

For the 2011 taxation year, an omitted assessment for $40,000 attributable to the addition will be issued effective October 12, 2011.

For the 2012 taxation year, an omitted assessment for $40,000 attributable to the addition will be issued effective January 1, 2012.

3 . Land Ceases to Be Exempt

A surplus school was sold on May 15 2012, to a developer for conversion to commercial retail use. The property was reflected as exempt from taxation for the 2012 and 2013 taxation years and ceased to be exempt on May 15, 2012.

2008 CVA of school $400,000
2012 CVA of school $500,000

For 2012 and 2013 taxation, an omitted assessment is issued changing the tax liability of the property from exempt to taxable in the commercial property class effective May 15, 2012.

Related Information

Ontario Regulation 282/98
Managed Forest Tax Incentive Program
Conservation Land Tax Incentive Program
Assessment Procedures for the Inspection of Residential Properties
Assessment Procedures for the Sales Review of Residential Properties
Assessment Procedures for the Assessment Review Board Complaint Process
Assessment Procedures for the Request for Reconsideration Process
Assessment Procedures for Senior and Disabled Property Tax Relief
Guide to Property Assessment for Newly-Built Homes (brochure)

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

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.

Information on this page may not be fully accessible. Please contact us at 1 866 296-6722 or TTY 1 877 889-6722 to determine how we can best accommodate you.