MPAC, established by the provincial government in 1998, is a non-profit corporation charged with putting a value on each of more than four million properties in the province, based on a current value assessment (CVA). Each municipality sets its tax rate, and then applies it to that assessed property value to come up with the property tax amount. So if MPAC assesses your property value at $300,000 and your municipality sets its tax rate at one per cent, your taxes will be 300,000 x .01, or $3,000.
How does MPAC really know what a cottage property is worth when each is unique and there are few comparables? Some are critical of the system in place, which requires MPAC to put a value on these difficult-to-assess properties using limited data; however, Larry Hummel, chief assessor at MPAC, explains that the corporation assesses all properties by applying variables from a list of more than 200 possibilities. It’s more complicated to figure out the value of a waterfront property than, say, a house in an inland suburb because there are more variables involved. They include, for instance, the quality of the shoreline: Is it rocky, weedy, gently sloped, steep? Still, 85 per cent of the value of any property is typically found in just five key variables: location (which includes the lake the property is on), size of lot (which includes water frontage), size of cottage, age of cottage, and quality of construction. Hummel is confident that MPAC gets it right most of the time. He says the question to ask yourself when you scrutinize your cottage property assessment this fall is: “Could I have sold my property for that price on January 1, 2012 (the current assessment date for all Ontario properties?)” If the answer is yes, then MPAC did its job.
Should you disagree with your assessment, however, you can request more information—MPAC has a website where you can view your own and neighbours’ assessments in detail—and you can appeal. For more information on how to handle an updated property assessment, check out this article.