Ontario Property Tax Reassessment Delay:
A Commercial Real Estate Guide 

Understanding Ontario’s Property Tax Reassessment Delay

In 2016, Ontario’s Municipal Property Assessment Corporation (MPAC) conducted the last full reassessment, updating property values to reflect the market. The next reassessment, initially scheduled for 2020, has been delayed due to the COVID-19 pandemic and subsequent government reviews.

This delay means that property taxes remain based on 2016 values. MPAC has continued issuing new notices annually to reflect real estate changes, but a full Ontario reassessment remains on hold.

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Why Regular Reassessments Benefit Ontario Taxpayers

Under Ontario’s normal assessment cycle, real property values are updated every four years to reflect market conditions. This ensures fairness and equity by taxing real estate based on current market values. Regular reassessments prevent discrepancies and large tax increases when market values change.

With reassessments delayed, commercial real estate owners and investors may be paying more than necessary if their real property values have depreciated, or less if values have appreciated since 2016.

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How the Ontario Reassessment Delay Impacts Your Business

The delay in Ontario’s property reassessment introduces several key challenges for businesses with commercial real estate portfolios. Here’s how it can affect your operations:

Budget Planning Difficulties

Without updated property values, businesses across Ontario face uncertainty when planning for future tax liabilities. This makes it difficult to allocate resources effectively, leaving companies either over-allocating funds or risking unpreparedness for sudden tax hikes when the reassessment occurs.

Overpayment of Property Taxes

For properties that have depreciated since 2016, businesses may be overpaying taxes based on outdated valuations of their real estate. This overpayment reduces profitability and ties up capital that could otherwise be reinvested into the business.

Competitive Disadvantage

Businesses operating in Ontario may face a competitive disadvantage compared to those in regions where property taxes are updated more frequently. Being taxed on outdated real estate values means higher costs relative to competitors with more current assessments.

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Opportunities for Tax Savings During the Ontario Reassessment Delay

Despite the reassessment delay, businesses have several key opportunities to reduce their current property tax liabilities. Proactively exploring these options can help companies take control of their property tax obligations now rather than waiting for the reassessment.

Review Mpac Notices

MPAC continues to issue annual Property Assessment Notices to reflect changes in real property ownership, renovations, and new construction. Reviewing these notices closely is critical. Any discrepancies or over-assessments can be appealed, providing businesses with an opportunity to lower their tax burden. Ignoring these notices could mean missing out on potential savings.

Appealing Current Property Tax Assessments

Businesses with real estate that has declined in value since 2016 may be overpaying in taxes. While the reassessment is delayed, these companies still have the opportunity to appeal their existing assessments and potentially reduce their tax liabilities. This can lead to immediate savings, helping to ease financial pressure until the reassessment occurs.

Mergers, Acquisitions, and Investments

If your business has recently acquired new properties or is going through mergers or acquisitions, it’s essential to ensure that real property valuations are accurate. Inaccurate valuations can lead to over-assessment and higher taxes. Working with a property tax expert ensures that new valuations are properly managed and aligned with current market conditions, preventing unnecessary overpayment.

Exploring Credits and Incentives

Businesses often overlook available tax credits and incentives that could significantly reduce their property tax liabilities. A property tax expert can help you identify and apply for these incentives, offering additional avenues for savings. This is especially useful for businesses undergoing new construction, renovations, or other capital improvements.

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Preparing for Ontario’s Pending Reassessment

Partnering with a proactive property tax expert well before the reassessment occurs is crucial for businesses looking to navigate any potential appeals effectively. Here’s how the right partner can help you prepare:

Prepare Early to Minimize Appeal Delays

When the reassessment finally happens, an influx of appeals is expected, leading to inevitable backlogs. By preparing early and developing a clear appeal strategy, you can significantly reduce the risk of being caught in these prolonged delays. A proactive property tax partner already familiar with your properties can help ensure that you’re ready to act swiftly and efficiently, positioning your business to avoid unnecessary waiting periods while others face extended timelines for appeal resolutions.

Mitigate Tax Increases

For businesses with real estate that has appreciated since 2016, the reassessment could lead to significant tax increases. A property tax expert familiar with your properties and the markets you  operate in can help you project potential increases. By building contingency plans early, your business can better absorb the financial impact. This foresight allows you to implement strategies to reduce immediate financial strain when the reassessment occurs, such as negotiating or planning phased payments.

Comprehensive Property Knowledge and Strategy

A proactive property tax partner does more than just help you file appeals; they bring in-depth knowledge of your property’s value and the local tax landscape. This expertise allows them to assist with long-term forecasting and budgeting, ensuring that your business remains prepared for any future tax changes. By maintaining ongoing engagement with your portfolio, they can provide tailored tax strategies, including opportunities to optimize savings through incentives, exemptions, or efficient capital improvement management.

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Act Now to Maximize Property Tax Savings

While Ontario’s reassessment delay creates uncertainty, it also provides an opportunity for businesses to optimize their tax strategy. By taking proactive steps now, companies can ensure they are not overpaying taxes and are well-prepared for future changes.

Contact DMA today to schedule a consultation and secure your property tax savings before the reassessment.