Toronto Condominium Taxation

Condominium Taxation One of our valued clients is spearheading an effort to convince the municipal government to consider a “condominium-specific tax rate”. This report, reprinted with permission, should be of interest to every condominium home owner. Condominiums, even though they have been around for quite sometime 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. Maclean’s Magazine, in its December 31st, 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 lead many urban municipalities to allocate an ever increasingly larger proportion of larger 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 CONDOMINUM 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 by the 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 create a specific tax rate for authorities even if they wish to do so. Thus the Assessment Act of Ontario must be amended to permit a category of assessment for condominiums, thereby permitting the municipality, if they choose 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 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. 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 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 board of directors in Ontario. In that regard, 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 spend their motion to the association of Municipalities of Ontario (the municipal lobby groups) requesting them in turn to support this motion and so notify the government of Ontario of this legislation requirement. We sent a letter to our local MPP requesting him to support our action to amend the assessment act of Ontario and to sew petition the minister of finance (who’s ministry is responsible for the act) to make this amendment. We met with the executive of our property management company, Del property management inc., and asked them to place this issue before the board of directors for each condominium managed by Del. We sent copies of all our correspondents to the Toronto chapter of the Canadian condominium institute and asked them to use their offices to lobby the government of Ontario accordingly. Lastly, through the office of president Del property management Inc., we’ve requested him to petition the president of Tridel Corporation (one of the principal condo developers in Ontario) to prepare a letter for the premier of Ontario supporting our action to amend the assessment act of Ontario. 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 sizable voter block 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 Councilors 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.

We The Canadian Condominium Institute - Toronto Chapter has adopted this issue as one of its priorities and, in conjunction with the association of Condominiums Managers of Ontario (ACMO), hired a lobbyist to champion these issues before the Government of Ontario. We wish to thank Del Property Management Inc.,. For reacting positively to out initiative by agreeing to put the information in this publication, 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, and to reprint this article in their “Condominium Life” magazine, which generally reaches all homeowners in the various condominium communities they manage. We would also like to thank the President of Tridel for considering sending a letter to the Premier of Ontario supporting this initiative and urging the Premier to undertake this change. Success in this endeavor 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 sizeable 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 Corporation urges all of the other Condominium Board of Directors in Ontario to lobby their municipal Council and MPP’s for this change. Together, we can be successful. Please refer any comments or questions regarding this article to: Mr. Ernest (Ernie) Nyitrai, the Board of Directors, Y.R.C.C. No. 636, 25 Austin Drive, Markham, Ontario, L3R 8H4, 905-477-1511, [email protected].