Property taxes are the product of the property assessment, usually determined by a provincial Assessment Authority such as MPAC, Ontario; SNB, New Brunswick; PVSC, Nova Scotia, Taxation PEI, and MAA, Newfoundland (the City of St. John’s does its own assessments); and the mill rate. The latter is set by the municipality so there is little you can do about it. However the mill rate varies with your property classification, which is decided by the Assessment Authority. The property classification and real estate assessment can both be appealed.
The provincial Assessment Acts decree that a property assessment be based on its Market Value i.e. the price at which it would sell, on a specified Base Date. Assessment Authorities usually assess property below its Market Value to discourage appeals and make their life easier. Unfortunately there is nothing uniform about the under assessments so nearly identical properties frequently have very different assessments … fortunately most Assessment Acts anticipate this type of dodgy manoeuver and legislate that your property assessment be no higher than that of comparable properties.
Not every property is over-assessed. Use our Property Tax Checkup to determine if the opportunity exists to reduce your property tax load. If an appeal is warranted, and you decide to retain our services (or do it yourself), it will be necessary to go through the following Appeals Process:-
We settle over 90% of appeals by negotiation with the Assessor. Nevertheless it is sometimes necessary to proceed to court where points of principle are involved or the Assessor is obdurate. Potentially therefore we employ the following three stage process:
Stage 1 (Assessment Audit) – We compare the property assessment with assessments of comparable properties on a unitised basis: obtain and review the Assessor’s calculations, check for computational errors, verify that the property has been properly classified, compare the land value with sales of similar sites, cost the building and apply the appropriate measures of depreciation and obsolescence, validate any income, expense and capitalisation data used, with market conditions. We report back to you, our client, by letter with a thorough analysis of the Assessor’s calculations, detailing our estimate of the correct assessment, the potential tax savings, our recommended course of action, the probability of success and, where appropriate, the associated cost. (If you have used our Property Tax Checkup service we may be able to dispense with this Assessment Audit Stage if we uncover egregious errors in the Tax Assessor's methodology and calculations. in that event we will recommend proceeding direct to Stage 2-Negotiations).
Stage 2 (Negotiations) – If there is an opportunity for tax savings and you wish us to proceed we prepare a position paper and open negotiations with the Assessor. We are able to conclude over 90% of all appeals by negotiation. However if we are unable to reach a satisfactory settlement we report back to you, by letter, detaining our recommended course of action, the probability of its success and the associated cost.
Stage 3 (Appeal Board) – We appear on your behalf to present your case before the Appeal Board. Legal counsel is required for appearances before some Appeal Boards.
At each stage of the appeal process we will file the appropriate documentation. The decision whether to proceed to each stage rests entirely with you: the potential tax savings and the probability of achieving them have to be weighed against the cost involved.
We offer three mutually exclusive fee options for each Stage depending on your appetite for risk, ranked by cost (larger to smaller):
- Performance – our fee is computed as a percentage of your Year 1 tax savings assuming no “phase in" of the assessment reduction or claw back (by the municipality). The earlier that you appeal in the assessment cycle, the greater your tax savings. Your upside is that you do not pay us a fee unless we achieve tax savings. The downside is that we cannot proceed to court if our remuneration is contingent on the outcome of the appeal since little weight may be placed on our evidence. While it is rarely necessary to take the court route it obviously limits our negotiating room if the ultimate step, resolution by the Appeal Board, is only available to the Assessor.
- Fixed Fee – we provide a fixed fee for each (potential) stage of the appeal (audit, negotiation, court) before we commence work on each stage.
- Cost Plus – this is based on our estimate of the cost, based on time and expenses.