Many individuals are unaware of the tax relief that the Ontario Municipal Act may provide to Ontario property owners in certain circumstance. Toronto has a similar Act all of their very own and is not discussed in this article. The most common section of the act dealing with tax refunds is section 357. Below is an excerpt from the Section of the Municipal Act dealing with the circumstances for refunds but beware. Prepare yourself for a battle with the Municipality and in particular the City of Ottawa if you are making an application under section 357. (1) (d).

Here is what the Act says:

Cancellation, reduction, refund of taxes

357. (1) Upon application to the treasurer of a local municipality made in accordance with this section, the local municipality may cancel, reduce or refund all or part of taxes levied on land in the year in respect of which the application is made if,

(a) as a result of a change event, as defined in clause (a) of the definition of “change event” in subsection 34 (2.2) of the Assessment Act, during the taxation year, the property or portion of the property is eligible to be reclassified in a different class of real property, as defined in regulations made under that Act, and that class has a lower tax ratio for the taxation year than the class the property or portion of the property is in before the change event, and no supplementary assessment is made in respect of the change event under subsection 34 (2) of the Assessment Act;

(b) the land has become vacant land or excess land during the year or during the preceding year after the return of the assessment roll for the preceding year;

(c) the land has become exempt from taxation during the year or during the preceding year after the return of the assessment roll for the preceding year;

(d) during the year or during the preceding year after the return of the assessment roll, a building on the land,

(i) was razed by fire, demolition or otherwise, or

(ii) was damaged by fire, demolition or otherwise so as to render it substantially unusable for the purposes for which it was used immediately prior to the damage;

(d.1) the applicant is unable to pay taxes because of sickness or extreme poverty;

(e) a mobile unit on the land was removed during the year or during the preceding year after the return of the assessment roll for the preceding year;

(f) a person was overcharged due to a gross or manifest error that is clerical or factual in nature, including the transposition of figures, a typographical error or similar error but not an error in judgment in assessing the property; or

(g) repairs or renovations to the land prevented the normal use of the land for a period of at least three months during the year. 2001, c. 25, s. 357 (1); 2002, c. 17, Sched. A, s. 62; 2002, c. 22, s. 158; 2004, c. 31, Sched. 26, s. 6.

Exception, vacant unit rebate

(1.1) For 2007 and subsequent taxation years, no cancellation, reduction or refund of taxes is permitted under clause (1) (g) in respect of land that is eligible property under section 364. 2007, c. 7, Sched. 26, s  1.

Here is how the City applies it.

If you are making an application under Section (d) beware that the City have chose to define the term “Otherwise” to mean that your building must burn down or be torn down OTHERWISE we will not give you a refund. We have a recent case where the property owner found traces of contamination in the building and had to do major renovations to get rid of it. The application to the City was denied. The owner can apply for a vacancy rebate under Section 364 of the Act however in the case of a commercial building that provides only a 30% rebate of the value of the tax liability whereas, in this case, the owner should have received a 60% rebate. No small change when your taxes are over $100,000/year. How about the owner who found out a City water meter broke and flooded his property. The City says the owner wasn’t doing repairs – he was renovating for the benefit of a new tenant. The list goes on.

To make matters worse these application are being denied by City staff without complying to the requirements the Municipal Act – that is a article on its’ own. Fortunately there is an appeal avenue to the Assessment Review Board provided you appeal within the legislated deadlines.


Legal Note:

The opinions stated here are those of the author and do not necessarily reflect the opinion of Property Tax Review Services

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