Condominiums and Municipal Taxation

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Condominiums and Municipal Taxation

As a condo sales professional I always wonder why condominiums in high rise buildings are assessed as any other single family residential units for the purpose of municipal tax bills. Specially when condos utilize far less land area, enabling them to accommodate more people within a high rise building. Recently, while reading Del Condominium Life magazine I stumbled upon this interesting article written by one of the directors of the board at the York Region Condominium Corporation (YRCC) 636, Mr. Ernest (Ernie) Nyitrai.  I am sharing the same on my condo blog. 

Ernie's efforts and his message to all The other condo board of Directors

Condominiums, even though they have been around for quite some time in Ontario, have only modestly grown in the past and mostly only in urban areas.  However, all that started to change in the late 1980's when growth in condominium development began to expand.  This growth increase almost seemed to double each year.  In fact, in many urban areas, especially in the Greater Toronto Area, they have almost come to supplant single-family residences as the preferred form of residential accommodation.  MacLeans magazine, in its December 31, 2007 issue, featuring real estate in Canada, postulated that half the people in urban Canada will be living in condos by 2025. 

This growth has led many urban municipalities to allocate an ever-increasingly larger proportion of residential building permits to condominium development.  Since condominium developments, specifically high-rise condominiums, utilize less land area, they have also become an excellent planning tool for the urban municipality, enabling them to accommodate more people in a smaller land area.

Although this growth in condominium developments has increased, almost exponentially in recent times, one aspect of condominium life has not changed, namely assessment on condos for the purpose of municipal taxes.

EACH CONDOMINIUM UNIT IS STILL ASSESSED AS A SINGLE-FAMILY RESIDENTIAL UNIT FOR THE PURPOSES OF THE MUNICIPAL TAX BILL

This is the case because the Assessment Act of Ontario (the legislation which specifically covers the way properties are assessed in Ontario for municipal and school taxation purposes) does not identify condominiums as a specific category of assessment. Thus a condominium-specific tax rate cannot be created by the local municipality, since the municipality can only do those things granted to it by provincial legislation. Since the Assessment Act of Ontario does not permit a distinct category of assessment for condominiums, the municipality does not have the authority to create a specific tax rate for condominiums, even if they wished to do so.

Thus the Assessment Act of Ontario must be amended to permit a category of assessment for condominiums and therefore permitting the municipality, if they chose to do so, to create a condominium-specific tax rate. 

However, we must be aware that although the municipality would have the ability to establish a condominium-specific tax rate with this amendment, they would probably not be mandated to do so by this change.

Our condominium Board of Directors recognized this deficiency in legislation some time ago.  They felt, that if this change is ever to occur, it will not happen on its own.  The Ontario-wide condominium community must ask for it, in fact must lobby for it.

Our Condo Board of Directors felt so strongly about this issue, that they felt something had to be done and were ready to take action.  They also felt that their action had to be shared with other condominium Boards of Directors in Ontario.  

We undertook the following five-part plan:

  • We submitted a letter to our local municipality (the Town of Markham) asking Council to pass a motion requesting the Province of Ontario to amend the Assessment Act of Ontario to create a specific category of assessment for condominiums. Once this motion was passed, we asked them to send their motion to the Association of Municipalities of Ontario (the municipal lobby group) requesting them in turn to support this motion and so notify the Government of Ontario of this legislative requirement.
  • We sent a letter to our local MPP requesting him to support our action to amend the Assessment Act of Ontario and to so petition the Minister of Finance (whose Ministry is responsible for the Act.) to make this amendment.
  • We met with the principals of our property management company, Del Property Management Company and asked them to place this issue before the Boards of Directors for each condominium they manage.
  • We sent copies of all the correspondence we had taken to the Toronto Chapter of the Canadian Condominium Institute and asked them to use their offices to lobby the Government of Ontario accordingly.

Although our condo corporation initiated this action, we feel that success can only be achieved if the many other condo corporations in Ontario undertake to do something similar, if not the same thing that we did.  Only with our collective many voices, representing this sizeable voter bloc in Ontario, can we hope to be successful in our endeavors.

What has happened since we began this initiative in February, 2008?

  • We met with our MPP, Michael Chan, and presented him with a letter requesting his support for our action. He wrote a letter to Dwight Duncan, Minister of Finance, on our behalf and asked the Minister to respond to our petition. Recently, we received a letter from the Minister, the Hon. Dwight Duncan, acknowledging receipt of our letter. Although he did not unilaterally accept our petition, he did not outright reject it either.
  • The Town of Markham, after receiving our letter, referred it to their ad-hoc Condominium Working Group, made up of Councillors and municipal staff to discuss this issue and others around the explosive growth of condominiums in Markham. We requested recognition and appointment to this committee. On June 24, 2008, the Council of the Town of Markham appointed a representative from our condo corporation to this committee. We are now at the table.
  • The Canadian Condominium Institute – Toronto Chapter has adopted this issue as one of its priorities and, in conjunction with the Association of Condominium Managers of Ontario (ACMO), hired a lobbyist to champion these issues before the Government of Ontario.
  • Del Property Management reacted positively to our initiative. They agreed to take our initiative and put the information in 2 in-house Del newsletters. The first would go in their "Del-o-gram" which primarily goes to Boards of Directors and Property Managers suggesting that this topic be on a future agenda of the Boards of Directors of each condominium they manage. The second would be to reprint this article in "Condominium Life" magazine which generally reaches all condominium owners in the various properties they manage.

Success in this endeavour cannot be accomplished overnight.  Nor did we expect that it would.  However, we are in this effort for the long haul.

At this moment, we believe that we are only one of a very few condominium corporations to undertake this initiative. But to be successful, we believe that all condo corporations in Ontario need to undertake an effort similar to ours. 

Finally, remember that condo living is now a way of life for an ever-increasing number of people in Ontario.  We have now become a very sizable voting bloc among the electorate of Ontario and because of this; we should start using this influence.

Therefore;

 

THE BOARD OF DIRECTORS OF OUR CONDOMINIUM URGES ALL THE OTHER CONDOMINIUM BOARD OF DIRECTORS IN ONTARIO TO LOBBY THEIR MUNICIPAL COUNCIL AND MPP FOR THIS CHANGE.

TOGETHER WE CAN BE SUCCESSFUL

Ernest (Ernie) Nyitrai, Member
Board of Directors YRCC 636
25 Austin Drive
Markham, ON
L3R 8H4

enyitr618@rogers.com

By | 2017-01-23T12:11:12+00:00 September 22nd, 2009|Categories: Condos, Realty Talk|Tags: , |Comments Off on Condominiums and Municipal Taxation

About the Author:

Amit Kalia
Amit is a full time local REALTOR® since 2003. Currently he is with RE/MAX Real Estate Brokerage Inc. in Mississauga. RE/MAX is Canada's #1 real estate company. He is supported by a very strong Sales and Marketing team. Together with his team, Amit has been serving property sellers, first time buyers, real estate investors, landlords, renters, new immigrants to Canada and non-residents. Amit and his team specialize in Square One condos and also work in many other Mississauga neighbourhoods. Team Amit Kalia offers a 30 Days Sold Guarantee to Sellers. Amit's team also provides exclusive A La Carte property management services for their investor clients and landlords.