Yonge St. businesses to get property tax break
Up to province to address longer-term issue, MPAC says
The provincial agency that assesses property values has agreed to lower the value of some Yonge St. properties hit with exorbitant tax increases, but says it’s up to Queen’s Park to change how such calculations are made.
“The affected small businesses have already been made aware of the reduction and MPAC (Municipal Property Assessment Corp.) will issue official reduced property assessment notices in September,” a spokesperson said by email.
Mayor John Tory this week wrote to Finance Minister Charles Sousa asking the province to fix the methodology to allow for a “more realistic” appraisal of the downtown commercial properties.
Recent property tax reassessments by MPAC left business owners with “sticker shock” that led many to close or consider closing, Tory wrote in his letter.
MPAC calculates properties’ current value assessment (CVA) based on a comparison of nearby land sales, which have spiked due to land speculation for condo development.
“MPAC is using the direct sales comparison of Yorkville’s 1 Bloor West development project at the corner of Yonge St. to forecast the highest and best use for every other commercial building on Yonge St.,” Councillor Kristyn Wong-Tam wrote in an opinion piece in last weekend’s Star.
“This approach contributes to a speculative real estate market where projected future values appear to be reported by MPAC as current values.”
Officials at Queen’s Park directed all inquiries back to the property assessment agency.
“MPAC’s role is to administer the property assessment system in Ontario, while the methodology itself is defined by the government of Ontario under the Assessment Act,” an emailed statement said.
The vast majority of the Yonge St. businesses are tenants, not building owners, so many are trapped in leases in which their contracts force them to pay any additional annual taxes, according the Yonge Street Small Business Association’s website.
Some of the storefronts, facing increases of up to 500 per cent, have signs in the windows declaring a “tax revolt” and blaming the mayor, though he had no control over the increases.
On Thursday, Councillor Wong-Tam said while she welcomes MPAC’s “willingness to reassess the properties on Yonge St.,” it is a “short-term solution.”
“The necessary change in policy goes beyond MPAC,” Wong-Tam stated.
The mayor “sees MPAC’s statement today as a good first step,” said Don Peat, director of communications.
“As his letter stated, he looks forward to working with Minister Sousa to find a way to fix the provincial assessment system.”