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The is currently examining realty taxation policies and is currently seeking input from various stakeholders as it relates to the Capping Program, first introduced as a temporary measure in 1998. This initiative is in response to feedback from municipalities and taxpayers that have expressed concern over the continuation of the existing program and whether changes are warranted to get closer to the objective of having all business properties in a tax position that equals Current Value Assessed (CVA) multiplied by the tax rate.

In its current state, the program is still being used as a mitigation tool which results in a series of inequities within specific property classes and jurisdictions. Theoretically, capped and clawed back properties balance each other out such that the net impact to the tax base is zero. In essence, those enjoying a capped position are being offset (or subsidized) by those that are in the claw back position who are arguably paying more than they should.

We expect to see additional updates from the Ministry of Finance in early to mid-fall of 2015 as they canvas the tax and finance community to gather feedback to determine if the system needs to be tweaked, over-hauled or potentially phased out altogether. The Ministry of Finance’s most recent presentation on the subject can be found , for your review.

In parallel to the Business Tax Capping, the review is also examining the Vacant Unit Rebate Program and canvassing feedback in the context of;

  1. Determining if there is still a need for such a program;
  2. Examining if there is a way to provide additional flexibility to the Municipalities;
  3. Reviewing its suitability for Vacant Units as well as Vacant / Excess Land Subclasses;
  4. Re-positioning it as a penalty as opposed to a reward in terms of providing incentive for property owners to put vacant property to use

It is expected that findings from this review process will be released in parallel with those of the Business Capping Program, in terms of timing and any changes for 2016 or 2017. Both programs have had an increasingly large impact on municipalities and it is largely expected that there will be changes implemented for the next re-assessment cycle, effective for the 2017 tax year.

For any questions on the above matter, you can contact via blanglois [at] aecpropertytax.com (subject: Email%20thru%20AEC%20website%20-%20Review%20of%20Business%20Tax%20Capping%20and%20Vacancy%20Program%20Rebates) (email) or directly at 416.224.9078.

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