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, enyitr618@rogers.com.