O. Reg. 162/09: Tax Matters - Transition Ratios and Average Transition Ratios

 

ontario regulation 162/09

made under the

Municipal Act, 2001

Made: April 16, 2009
Filed: April 17, 2009
Published on e-Laws: April 21, 2009
Printed in The Ontario Gazette: May 2, 2009

Amending O. Reg. 385/98

(Tax Matters — Transition Ratios and Average Transition Ratios)

1. Ontario Regulation 385/98 is amended by adding the following section:

Definitions

0.1 In this Regulation,

“commercial classes” has the meaning set out in subsection 308 (1) of the Act;

“industrial classes” has the meaning set out in subsection 308 (1) of the Act;

“optional property class” has the meaning set out in subsection 308 (1) of the Act;

“specified residential class” means the residential, farm, managed forest or new multi-residential property class;

“unadjusted tax ratio” means, in respect of a property class for 2009,

(a) the tax ratio for the property class for 2008, or

(b) if section 8 of Ontario Regulation 73/03 (Tax Matters — Special Tax Rates and Limits, 2003 and Later Years) made under the Act applied to the property class in 2008,

(i) the tax ratio for the property class for 2009 that is determined under subsection 7 (1) of that regulation if the property in the class is in a single-tier municipality, or

(ii) if the property in the class is in an upper-tier municipality, the tax ratio for the property class for 2009 that would be determined under subsection 7 (1) of that regulation if that subsection were to apply to the upper-tier municipality and if subsections 7 (2) and (3) of that regulation were not to apply.  

2. The Regulation is amended by adding the following heading before section 1:

Ratios for Years Before 2009

3. The Regulation is amended by adding the following sections:

Transition Ratios, 2009

9. (1) This section applies for the 2009 taxation year to a municipality if, in comparison to 2008, the percentage of total tax revenue for 2009 derived from tax on property in a class other than a specified residential class would be lower in 2009 if the unadjusted tax ratios for 2009 were applied.

(2) If this section applies to a municipality, the municipality may establish a tax ratio for 2009 for the property class referred to in subsection (1) that is greater than the unadjusted tax ratio for the class but not greater than the transition ratio determined for the class under this section.

(3) If a municipality establishes a tax ratio for a property class under subsection (2), the transition ratios determined under this section apply to the municipality for 2009 except for the purposes of,

(a) the specified residential classes; and

(b) an optional property class if 2009 is the first year in which the optional property class applies in the municipality.

(4) The following rules apply for the purposes of this section:

1. The total assessment of the properties in a property class for 2008 includes all assessments made for the purposes of taxation for 2008 that are made after the return of the roll for 2008.

2. In determining the total assessment of the properties in a property class for 2009, a municipality may elect to exclude the assessment of a property in the property class if,

i. the current value of the property has,

A. increased since 2008 by 100 per cent or such greater percentage as the municipality elects, or

B. decreased since 2008 by 25 per cent or such greater percentage as the municipality elects, and

ii. the municipality also excludes the assessment of the property in determining the total assessment of the properties in the property class for 2008.

3. An optional property class is considered to be a separate property class for the purposes of subsection (5).

(5) Subject to sections 10 and 11, the transition ratio for a property class for the purposes of subsection 308 (10) of the Act is determined as follows:

1. Multiply the unadjusted tax ratio for the property class for 2009 by the amount of the total assessment of the properties in that property class for the year.

2. Multiply the unadjusted tax ratio for the property class for 2009 by the amount of the total assessment of the properties in that property class for 2008.

3. Determine the weighted reassessment change for the specified residential classes by dividing “A” by “B” where,

“A” is the sum of all amounts each of which is an amount determined under paragraph 1 for a property class included in the specified residential classes, and

“B” is the sum of all amounts each of which is an amount determined under paragraph 2 for a property class included in the specified residential classes.

4. Determine the weighted reassessment change for the commercial classes by dividing “C” by “D” where,

“C” is the sum of all amounts each of which is an amount determined under paragraph 1 for a property class included in the commercial classes, and

“D” is the sum of all amounts each of which is an amount determined under paragraph 2 for a property class included in the commercial classes.

5. Determine the weighted reassessment change for the industrial classes by dividing “E” by “F” where,

“E” is the sum of all amounts each of which is an amount determined under paragraph 1 for a property class included in the industrial classes, and

“F” is the sum of all amounts each of which is an amount determined under paragraph 2 for a property class included in the industrial classes.

6. For each property class that is not included in the specified residential classes, the commercial classes or the industrial classes, determine the weighted reassessment change for the property class by dividing the amount determined under paragraph 1 for the property class by the amount determined under paragraph 2 for the property class.

7. Determine the adjustment factor for each property class by dividing “G” by “H” where,

“G” is,

(a) the weighted reassessment change for the commercial classes as determined under paragraph 4 if the property class is included in the commercial classes,

(b) the weighted reassessment change for the industrial classes as determined under paragraph 5 if the property class is included in the industrial classes, or

(c) the weighted reassessment change for the property class as determined under paragraph 6 if the property class is not included in the specified residential classes, the commercial classes or the industrial classes, and

“H” is the weighted reassessment change for the specified residential classes as determined under paragraph 3.

8. Determine the transition ratio for the property class for 2009 by dividing the unadjusted tax ratio for the property class for 2009 by the adjustment factor for the property class determined under paragraph 7.

New Multi-Residential Property Class

10. For 2009, the transition ratio for the new multi-residential property class in a municipality is equal to the tax ratio for that class in the municipality for 2008. 

Property Classes New to Municipality

11. The following rules apply for the purposes of subsection 308 (10) of the Act in determining the transition ratio for a property class in a municipality for 2009:

1. Subject to paragraphs 2 and 3, the transition ratio for a year for a property class other than an optional property class is the upper limit of the allowable range of tax ratios prescribed for the property class if no property was classified in the property class in 2008.

2. If no property was classified in the commercial property classes in 2008 and property was classified in the industrial property classes in 2008,

i. the municipality may elect to have the average transition ratio for the industrial classes prescribed in paragraph 2 of subsection 12 (1) apply to both the commercial classes and the industrial classes, or

ii. if paragraph 2 of subsection 12 (1) does not apply in the municipality, the municipality may elect to have the transition ratio for the industrial classes apply for 2009 to both the commercial classes and the industrial classes.

3. If no property was classified in the industrial classes in 2008 and property was classified in the commercial property classes in 2008,

i. the municipality may elect to have the average transition ratio for the commercial classes prescribed in paragraph 1 of subsection 12 (1) apply to both the commercial classes and the industrial classes, or

ii. if paragraph 1 of subsection 12 (1) does not apply in the municipality, the municipality may elect to have the transition ratio for the commercial classes apply to both the commercial classes and the industrial classes.

Average Transition Ratios

12. (1) The following rules apply for the purposes of subsection 308 (10) of the Act for the 2009 taxation year:

1. The prescribed average transition ratio for the commercial classes is the weighted average of the 2009 transition ratios for the property classes within the commercial classes.

2. The prescribed average transition ratio for the industrial classes is the weighted average of the 2009 transition ratios for the property classes within the industrial classes.

(2) For the purposes of subsection (1), the weighted average of the 2009 transition ratios is calculated using the formula in subsection 308 (14) of the Act, except that the phrase “tax ratios” in the portion before paragraph 1 shall be read as “transition ratios” and the phrase “tax ratio” in paragraph 1 shall be read as “transition ratio”.

(3) This section does not apply to determine transition ratios for the commercial classes or industrial classes, as the case may be, in the first year an optional property class applies in a municipality.

Special Rules

13. The following transition ratios, and not the transition ratios determined under section 9, 10 or 11, apply for 2009:

1. 1.500000 for the new multi-residential property class in the City of Brantford.

2. For the Municipality of Gordon/Barrie Island:

i. 1.000000 for the multi-residential property class.

ii. 1.028600 for the commercial property class.

iii. 0.614000 for the industrial property class.

iv. The upper limit of the allowable range of tax ratios prescribed for the property class in the case of any other property class.

4. This Regulation comes into force on the day it is filed.

Made by:

Dwight Douglas Duncan

Minister of Finance

Date made: April 16, 2009.