Appealing the taxes on your Hotel or Motel ? 

Top Ten questions to help you understand

Here are the answers to the TOP TEN questions that we get asked when speaking to owners about appeal their taxes.

Q1  How does MPAC value my Property ?

The property is valued using market derived assumptions for income and expenses and then applying a capitalization rate (derived from market sales) to arrive at a value.

Q2 What is included in income ?

Municipal Property Assessment Corporation MPAC captures room rental revenue as well as Food & Beverage revenue streams if applicable

Q3 What time frame is MPAC looking at ?

For the 2016 Current Value Assessment (CVA), which addresses taxes for 2017-2021,  the valuation date is January 1st, 2016. This means MPAC is looking at market evidence and performance at your property within the 2015-2016 time frame.

Q4 What is involved in the appeal process ?

Once the appeal is filed with the Assessment Review Board (ARB), ArGil Property Tax Services as your representative, MPAC and the municipality are parties to the proceedings. The ARB is the administrator and scheduler of the proceedings and will set down a series of dates once the appeal proceedings “Commence”. Once the Commencement Date is struck there are a series of dates and obligations for each of the parties to comply with in order to move toward three possible outcomes.

Q5  What does it cost to file an appeal ?

The Board requires a payment of $318 for a non-residential appeal and $125 for a residential appeal. This payment is made at time of filing and is non-refundable.  

Q6  What are the three possible outcomes of an appeal ?

  1. The first is a Withdrawal – where the Appellant comes to the conclusion they don’t have a case and they Withdraw.
  2. The second is a Settlement as outlined in Minutes of Settlement (MOS) where all parties have come to agreement on revisions to the assessment (value and/or classification)
  3. The third outcome is a Formal Hearing where the parties present their respective positions to the Board to seek a ruling.   

Q7  How long does an appeal take ?

The current system and inventory of old outstanding appeals translates into a reality that appeals take a long time. Depending upon where you are in the province and the particular appeal stream within which your properties falls an appeal can take from 18 to 36 months to be heard and / or resolved. While the ARB is continually updating its procedures and process to shorten the lifespan of an appeal, the existing backlog of old appeals and its impairment on expediency are facts that we have to learn to accommodate.

Q8 What if my appeal is not resolved by December 31st do we have to file another appeal ?

No.  If the appeal filed in the current year is not resolved by December 31st it gets “rolled over” into the next year and is “deemed” to be under appeal for that next year. No additional appeal fee is required and the Board records automatically update such that this new year gets added to the appeal proceedings.

Q9 Do I have to pay my taxes if I have an appeal filed with the ARB?

Yes. Penalties applied for late or non-payment are onerous and we always advise our clients to pay their taxes. Any adjustments arising from prior year appeals are processed initially as a credit and upon request converted to a refund.

Q10 Do I get interest back on any credit or refund ?

Under the provisions of the Municipal Act and the City of Toronto Act, there is no requirement for interest to be paid on historical credits or refunds arising from successful appeals.