Homestead Act to Provide Real Taxpayer Protection

MPP Hudak lntroduces Legislation that would cap Residential Property Assessment Increases at 5 per cent per year

Tim Hudak MPP Erie Lincolon Finance Critic

March 1, 2006

Queen's Park- Erie-Lincoln MPP Tim Hudak introduced his Private Member's Bill, the Homestead Act, 2006, today to bring real protection to Ontario homeowners facing rapidly increasing property assessments. The Homestead Act, if passed, will cap residential property assessment increases at five percent per year as long as home ownership is maintained. It will also support homeowners who make improvements to their homes and provide a property tax reduction for seniors and the disabled.

"Working families, seniors and young people are facing higher taxes, higher home heating costs, increased user fees and escalating energy costs in Dalton McGuinty's Ontario," said Hudak. "Rapidly increasing property assessments and resultant property tax increases are simply unaffordable to the beleaguered Ontario taxpayer."

Property assessments have skyrocketed in recent years, particularly in the recent 2006 assessment notices. The average assessed home in Ontario leapt from $179,151 in the 2003 taxation year to $232,883 in the 2006 taxation year. This past year, the average provincial assessment increase in the Residential Tax Class was 14.35 per cent, with many municipalities reporting increases of 15-35 per cent. Individual homeowners have been shocked to receive assessment increases of over 100 per cent.

"Homeowners need a much more predictable and transparent assessment system. Seniors are increasingly challenged by the growth in their tax bill. Sadly, many are being forced to sell the homes they built and maintained for decades." said Hudak. "The Homestead Act will support the Canadian value of home ownership."

Among others, the three primary benefits on the Homestead Act, 2006 include:

Seniors and the disabled would not pay property taxes on the first $10,000 of assessed value for their principal residence.

"Seniors are very worried that they will be unable to stay in their homes because of the unrealistic property assessments," said Judy Cutler, Director of Government and Media Relations with the Canadian Association of Retired Persons (CARP). "The Homestead Act will do much to allow seniors to stay in place, as so many of them choose to do."

The Homestead Act would cover all residential property including cottages. It would also allow the 5 per cent cap to remain in place if the owner were to transfer ownership to a child or spouse. Finally, the Bill would require MPAC (Municipal Property Assessment Corporation) to maintain a record of the current assessed value of the land and provide a copy to landowners within 24 hours, free of charge.

The system of province-wide Current Value Assessment (CVA) was designed to bring fairness to Ontario taxpayers. In the current environment of rapidly increasing residential assessments, proper protections for homeowners are warranted.

Ontario Ombudsman André Marin is currently reviewing MPAC as a result of the tremendous public outcry on the issue. To date, the Office of the Ombudsman has received over 3500 complaints from residents across Ontario. Ombudsman Marin's report will focus on the alleged lack of transparency in the property assessment system and the integrity and efficiency of the decision-making process. The report is expected in March, 2006.

Similar legislation to cap increases in residential property assessments exists in Nova Scotia, Arizona, California, Florida, Michigan, Minnesota, Maryland, New Mexico, Oregon and Texas.

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