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O. Reg. 419/02: TAX MATTERS - 2001 AND 2002 TAXATION YEARS

filed December 20, 2002 under Municipal Act, R.S.O. 1990, c. M.45

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ontario regulation 419/02

made under the

municipal Act

Made: December 20, 2002
Filed: December 20, 2002
Printed in The Ontario Gazette: January 4, 2003

Amending O. Reg. 171/01

(Tax Matters — 2001 and 2002 Taxation Years)

Note: Since the end of 2001, Ontario Regulation 171/01 has been amended by Ontario Regulation 162/02.  Previous amendments are listed in the Table of Regulations published in The Ontario Gazette dated January 19, 2002.

1. Ontario Regulation 171/01 is amended by adding the following Part:

part v
tax capping for 2002 on consolidation or division of parcels

Interpretation

17. (1) In this Part,

“assessment” means, in respect of a parcel of land for a year, the assessment for the parcel as shown on the assessment roll, as revised, for that year;

“assessment roll” means the assessment roll under the Assessment Act;

“average level of taxation” means, in respect of two or more parcels of land for 2001, the sum of the taxes for municipal and school purposes imposed on each parcel in 2001 divided by the sum of the taxes that would have been imposed in 2001 on each parcel if Part XXII.3 of the Act had not applied;

“consolidated parcel” means a parcel of land included on the assessment roll for 2002 that was included on the assessment roll for 2001 as two or more separate parcels;

“level of taxation” means, in respect of a parcel of land for a year, the level of taxation for the parcel for the year that would be determined under paragraph 1 of subsection 447.70 (2) of the Act;

“original parcel” means a parcel of land included on the assessment roll for 2001 that is severed or subdivided into two or more parcels of land that are included on the assessment roll for 2002;

“property class” means a property class under the Assessment Act;

“separate parcel” means a parcel of land included on the assessment roll for 2001 that is included on the assessment roll for 2002 as part of a consolidated parcel;

“severed parcel” means a parcel of land included on the assessment roll for 2002 that was part of an original parcel included on the assessment roll for 2001;

“subclass” means a “subclass of real property” as defined in section 1 of the Assessment Act.

(2) For the purposes of this Part, the commercial classes, as defined in subsection 363 (20) of the Act, shall be deemed to be a single property class and the industrial classes, as defined in that subsection, shall be deemed to be a single class.

Consolidation of parcels, par. 1 of subs. 447.68 (2) of the Act

18. (1) This section applies to determine, for the purposes of paragraph 1 of subsection 447.68 (2) of the Act, the amount of taxes for 2001 if two or more parcels of land that were included on the assessment roll for taxation in 2001 are consolidated into one consolidated parcel on the assessment roll for 2002.

(2) The amount of the taxes for 2001 for the consolidated parcel is the sum of the taxes for municipal and school purposes levied on the separate parcels for 2001 if the property class in which each separate parcel was included for 2001 and the property class in which the consolidated parcel is included for 2002 are the same.

(3) Subject to subsection (4), if two or more separate parcels were included in different property classes in 2001 to which Part XXII.3 of the Act applied and portions of the consolidated parcel are in the same property classes in 2002 as the separate parcels, the amount of taxes for 2001 for the portion of the consolidated parcel that is in the same property class for 2002 as the corresponding separate parcel in 2001 is the amount of taxes for municipal and school purposes levied for 2001 on the separate parcel. 

(4) If any of the separate parcels was included in the subclass for vacant land for 2001 and the corresponding portion of the consolidated parcel is included for 2002 in the subclass for excess land,

(a) the amount of the taxes for 2001 for the portion of the consolidated parcel that is included in the subclass for excess land is the amount of the taxes for municipal and school purposes that was levied on the separate parcel included in the subclass for vacant land for 2001; and 

(b) the amount of the taxes for 2001 for each portion of the consolidated parcel that is not included in the subclass for excess land is the amount of the taxes for municipal and school purposes that was levied for 2001 on the corresponding separate parcel if it was included in the same property class in 2001 as the portion of the consolidated parcel.

(5) If two or more of the separate parcels were included in the same property class to which Part XXII.3 of the Act applied in 2001 but only a portion of the consolidated parcel is included in that property class in 2002, the amount of the taxes for 2001 for that portion of the consolidated parcel is the amount determined by multiplying together the following amounts:

1. The average level of taxation of the separate parcels for 2001.

2. The tax rate levied by the municipality for 2001 on property in the same property class as that portion of the consolidated parcel.

3. The assessment of that portion of the consolidated parcel on the 2002 assessment roll.

(6) If two or more of the separate parcels were included in different property classes to which Part XXII.3 of the Act applied in 2001 and the consolidated parcel is included in the same property class for 2002 as one of those separate parcels, the amount of the taxes for municipal and school purposes for the consolidated parcel for 2001 is the amount determined in the following manner:

1. Determine,

i. the level of taxation for 2001 of the separate parcel that was included in the same property class in 2001 as the consolidated parcel, if only one separate parcel was in the same property class for 2001 as the consolidated parcel, or

ii. the average level of taxation for 2001 of the separate parcels that were included in the same property class in 2001 as the consolidated parcel, if more than one separate parcel was in the same property class for 2001 as the consolidated parcel.

2. Determine the sum of the assessments for 2001 of all of the separate parcels that were in different property classes for 2001 than the consolidated parcel.

3. Determine the tax rate levied by the municipality for 2001 on property in the same property class as the consolidated parcel.

4. Multiply the sum of the assessments determined under paragraph 2 by the tax rate referred to in paragraph 3.

5. Multiply the product determined under paragraph 4 by the lesser of,

i. 1.00, and

ii. the level of taxation or average level of taxation for 2001 determined under paragraph 1.

6. Add the product determined under paragraph 5 to the taxes determined under section 447.65, 447.67 or 447.70 of the Act for 2001, as the case may be, for all of the separate parcels that were included in the same property class in 2001 as the consolidated parcel.

(7) The amount of the taxes for municipal and school purposes of the consolidated parcel for 2001 is the amount determined under subsection (8) if,

(a) two or more of the separate parcels that were consolidated for 2002 were included in different property classes for 2001;

(b) not all of the separate parcels that were consolidated were included in  property classes that were subject to Part XXII.3 of the Act for 2001;

(c) the consolidated parcel is included in a single property class that is subject to Part XXII.3 of the Act for 2002; and

(d) the property class in which the consolidated parcel is included for 2002 is the same as the property class in which one of the separate parcels was included.

(8) For the purposes of subsection (7), the amount is determined as follows:

1. Determine,

i. the level of taxation for 2001 of the separate parcel that was included in the same property class in 2001 as the consolidated parcel, if only one separate parcel was in the same property class for 2001 as the consolidated parcel, or

ii. the average level of taxation for 2001 of the separate parcels that were included in the same property class in 2001 as the consolidated parcel, if more than one separate parcel was in the same property class for 2001 as the consolidated parcel.

2. Determine the sum of the assessments for 2001 of all separate parcels that were included in property classes that were not subject to Part XXII.3 of the Act.

3. Determine the tax rate levied by the municipality for 2001 on property in the same property class as the consolidated parcel.

4. Multiply the sum of the assessments determined under paragraph 2 by the tax rate referred to in paragraph 3.

5. Multiply the product determined under paragraph 4 by the lesser of,

i. 1.00, and

ii. the level of taxation or average level of taxation for 2001 determined under paragraph 1.

6. Add the product determined in paragraph 5 to the taxes determined under section 447.65, 447.67 or 447.70 of the Act for 2001, as the case may be, for all of the separate parcels that were in the same property class in 2001 as the consolidated parcel.

Severance or subdivision of land, par. 1 of subs. 447.68 (2) of the Act

19. (1) This section applies in determining, for the purposes of paragraph 1 of subsection 447.68 (2) of the Act, the amount of taxes for 2001 for a severed parcel,

(a) that formed part of an original parcel that was included on the assessment roll for 2001; and

(b) that is included as a severed parcel on the assessment roll for 2002.

(2) The amount of the taxes for municipal and school purposes for 2001 for a severed parcel that is in the same property class in 2002 as the property class in which the original parcel was included for 2001 is the amount determined in the following manner, if the original parcel was not included in 2001 in the subclass for vacant land:

1. Determine the taxes for municipal and school purposes calculated under section 447.65, 447.67 or 447.70 of the Act, as the case may be, for the original parcel for 2001.

2. Determine the ratio of the assessment of the severed parcel for 2002 to the assessment of the original parcel for 2001.

3. Multiply the amount of taxes determined under paragraph 1 by the ratio determined under paragraph 2.

(3) If a portion of the original parcel was included in the subclass for excess land for 2001, the taxes for municipal and school purposes for 2001 for a severed parcel that is not in the subclass for vacant land for 2002 and that is in the same property class as the corresponding portion of the original parcel that was not included in the subclass for excess land for 2001 is the amount by which the taxes for municipal and school purposes for 2001 for the original parcel exceeds the amount of those taxes relating to the portion of the original parcel that was included in the subclass for excess land for 2001.

(4) If the original parcel contains portions that are in different property classes to which Part XXII.3 of the Act applies and the severed parcels are contained in the same property class as a portion of the original parcel, the taxes for municipal and school taxes for 2001 for the severed parcel is the amount of the taxes levied on the corresponding portion of the original parcel.

Change in proportions of parcel in different property classes

20. (1) This section applies to a parcel that satisfies the following conditions:

1. Portions of the parcel were included in different property classes for 2001.

2. Portions of the parcel are included in the same property classes for 2002 and not in any other property class.

3. The assessment of each portion of the parcel in a property class has changed between 2001 and 2002.

4. The change in the assessment for each portion of the parcel included in a property class for 2002 is due only to a change in the proportion of the parcel included in each of the property classes, as a result of a change event described in clause (a) of the definition of “change event” in subsection 34 (2.2) of the Assessment Act.

(2) The taxes for municipal and school purposes for 2001 for the purposes of paragraph 1 of subsection 447.68 (2) of the Act for each portion of the parcel whose assessment increased between 2001 and 2002 is determined as follows:

1. Determine the amount of taxes levied on the portion of the property for 2001 under section 447.65, 447.67 or 447.70 of the Act, as the case may be.

2. Determine the amount of taxes that would have been levied on the portion of the property for 2001 but for the application of Part XXII.3 of the Act.

3. Divide the amount determined under paragraph 1 by the amount determined under paragraph 2.

4. Determine the amount of taxes that would have been levied on the increased portion of the property for 2001 but for the application of Part XXII.3 of the Act.

5. Subtract the amount determined under paragraph 2 from the amount determined under paragraph 4.

6. Multiply the remainder determined under paragraph 5 by the lesser of,

i. the quotient determined under paragraph 3, and

ii. 1.0.

7. Add the product determined under paragraph 6 to the amount determined under paragraph 1.

(3) The taxes for municipal and school purposes for 2001 for the purposes of paragraph 1 of subsection 447.68 (2) of the Act for each portion of the parcel whose assessment decreased between 2001 and 2002 is determined as follows:

1. Determine the assessment of the portion of the property on the 2001 assessment roll.

2. Determine the assessment of the portion of the property on the 2002 assessment roll.

3. Divide the amount determined under paragraph 2 by the amount determined under paragraph 1.

4. Determine the amount of taxes levied on the portion of the property for 2001 under section 447.65, 447.67 or 447.70 of the Act, as the case may be.

5. Multiply the amount determined under paragraph 4 by the quotient determined under paragraph 3.

Change in tax exempt portion of a parcel

21. (1) This section applies if the portion of a parcel of land that is exempt from taxes for municipal and school purposes changes between 2001 and 2002 and the change is due only to a change in the proportion of the parcel that is entitled to the exemption. 

(2) The taxes for municipal and school purposes for 2001 for the taxable portion of the parcel for the purposes of paragraph 1 of subsection 447.68 (2) of the Act is determined as follows:

1. If the assessment of the taxable portion of the parcel increased between 2001 and 2002, the taxes for municipal and school purposes for 2001 for that portion is the amount that would be determined in respect of the portion of the parcel under subsection 20 (2).

2. If the assessment of the taxable portion of the parcel decreased between 2001 and 2002, the taxes for municipal and school purposes for 2001 for that portion is the amount that would be determined in respect of the portion of the parcel under subsection 20 (3).

Mid-year demolition, etc.

22. (1) For the purposes of  clause 442 (1) (a.1) of the Act, the recalculation of taxes for 2002 shall include a reduction determined as follows:

1. If no by-law is passed under subsection 368.1 (4) of the Act, the reduction is,

i. 30 per cent of the taxes otherwise determined for 2002, if the property was included in the commercial classes, or

ii. 35 per cent of the taxes otherwise determined for 2002, if the property was included in the industrial classes.

2. If a by-law was passed under subsection 368.1 (4) of the Act, the reduction is the percentage of the taxes otherwise determined for 2002 that is set out in the by-law and that is between 30 per cent and 35 per cent.

(2) Paragraph 5 of subsection 447.68 (2) of the Act applies to a property even if the owner of the property was entitled to but failed to make an application to the council of the municipality under clause 442 (1) (a), (a.1), (c) or (f) or section 443 of the Act for a cancellation, reduction or refund of taxes for 2001, but only if the appropriate change is made to the assessment of the property on the assessment roll, as returned, for 2002.

Eligible property, s. 447.70 of the Act

23. (1) Subject to subsection (2), the following properties are deemed to be eligible property for the purposes of section 447.70 of the Act for 2002:

1. A parcel of land that is severed from a larger parcel of land or that is a lot in a subdivided parcel of land, if 2002 is the first year for which the parcel is included as a separate parcel on the assessment roll.

2. Despite subsection 447.68 (11) of the Act, property to which section 447.70 of the Act applied in 2001 as a result of an assessment made under subsection 34 (2) of the Assessment Act or a severance or subdivision, if clause 447.68 (8) (a) of the Act applies to the property for 2002.

3. Property in respect of which an assessment could have been made under section 34 of the Assessment Act in 2001 if,

i. making the assessment in 2001 would have resulted in the application of clause 447.65 (8) (a) of the Act to the property, and

ii. the appropriate change is made on the assessment roll for 2002.

(2) None of the following is eligible property for the purposes of section 447.70 of the Act for 2002:

1. A severed parcel if the original parcel is described in subsection 19 (2), (3) or (4).

2. A severed parcel that fails to satisfy the minimum size requirements for development under the relevant municipal zoning by-law.

Comparable property for purposes of s. 447.70 of the Act

24. If section 447.64 of the Act applies for 2002 to a property that is identified as a comparable property under section 447.70 of the Act, the amount of taxes for municipal and school purposes that would have been imposed for 2002 on the comparable property but for the application of Part XXII.3 of the Act, as determined for the purposes of paragraph 1 of subsection 447.70 (2) of the Act, shall be reduced to the same proportion of the taxes for municipal and school purposes that applies for 2002 under section 447.64 of the Act.

Janet Ecker

Minister of Finance

Dated on December 20, 2002.