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Property Tax Minimization Versus Management

Property Tax Minimization Versus Management Hero

What Property Tax Services Do You Require?

There are two primary property tax services available to commercial real estate owners. The first is often referred to as property tax appeal services and the second as property tax management services. They, as one would expect, are very different services and reflect markedly different approaches to property tax. Property tax management is a data- and software-driven approach. It involves collaboration with property tax assessment authorities and the application of multidisciplinary expertise. Its scope ranges from sharing the property and financial information of property owners with assessing authorities through to property tax bill administration and payment. In contrast, property tax appeal services have a single overriding focus and objective – minimizing the property taxes you pay. This is consistent with the approach of tax advisors the world over.

For a property owner seeking to manage their property taxes’ compliance with the requirements of assessing authorities’, property tax management services are appropriate. If, however, a property owner’s objective is ensuring they do not pay more property tax than necessary, they require property tax appeal services. In Ontario this means retaining the services of a tax advocate.

There are unique considerations to property tax services in Ontario. In May 2007 the Law Society of Ontario began licensing and regulating paralegals. Among the services paralegals were licensed to provide was advocating for and representing property owners before the Ontario Assessment Review Board (“Board”). This is reflected in the Rules of Practice and Procedure of the Board, which defines “representative” as “a person authorized under the Law Society Act or its By-Laws to represent a person in a proceeding before the Board”. The required advocacy services are provided by licensees of the Law Society of Ontario. 

What is not unique about Ontario’s property tax system is the taxpayer-driven audit function of property tax appeals. Unlike most taxes, property tax is not based on self-reporting, with the government conducting the audit function. Instead, the assessing authority establishes the assessed value of the property upon which property tax is based and municipalities undertake the tax payment enforcement function. To balance this system, a robust property tax assessment appeal system, the audit function, is required. In Ontario the appeal system contemplates taxpayers relying on the services of licensed advocates. Not incidentally, MPAC, the assessing authority in Ontario, has a large team of dedicated advocates representing it in property tax assessment appeals.

Appeals are an essential safeguard for taxpayers. The right of owners to appeal their property tax assessments is entrenched in legislation. Significantly, the January 2020 Standard on Property Tax Policy of the International Association of Assessing Officers states that “systems for hearing and deciding appeals of values and tax assessments are important components of property tax systems,” and adds that “Taxpayers need accessible and responsive avenues for challenging assessments, denied exemptions, and the classification to which property is assigned. Appeals systems should be designed to facilitate the taxpayer’s right to appeal.” Appeals buttress the fair, efficient and transparent property tax process necessary for sound, value-based property taxation. Mindful of the essential role of appeals within Ontario’s property tax system, Colliers takes an advocacy-first approach to property tax services.  We assist our clients in ensuring they pay no more than their required share of property tax. The focus of our appeal services is minimizing, not managing, property tax.

Top 6 Reasons Commercial Property Owners Should Consider an Advocacy-First Approach to Property Tax Appeals

  1. The ARB requires that taxpayers’ representatives be licensed by the Law Society of Ontario
  2. The ARB’s rules are complex, have been amended nine times and are accompanied by several Practice Directions
  3. MPAC draws from a large team of in-house advocates to represent it in appeals
  4. Expert valuators have a duty to the ARB
  5. Expert valuators have a duty to provide opinion evidence that is fair, objective and non-partisan
  6. As advocates for taxpayers, licensed representatives are openly and necessarily partisan

Property Tax Services