Homeowners see red over taxes
July 21, 2010
Comments on this story
(110)
Raveena Aulakh
STAFF REPORTER
Three letters from the city can never be good but Peter Labancz wasn’t worried — he was expecting them.
The three letters were property tax arrears for the years 2008, 2009 and 2010, adding up to $2,506.41 — no surprise there.
What shocked Labancz was that he had to pay the lump sum within a very narrow time frame: two installments in September and October.
“It’s what I feared all along . . . that we would have to pay all our back (property) taxes at the same time,” said Labancz, 33, a teacher at Upper Canada College. “It’s so unfair.”
Labancz said he isn’t trying to avoid paying his taxes; he’s happy, willing, to do his bit.
But like many others, he’s been caught in the slow-moving wheels of bureaucracy.
Property in Ontario is assessed by the Municipal Property Assessment Corporation (MPAC) whose inspectors also check new construction to assess the change in its value. Property can be assessed in the current year and going back up to two years.
It means the longest any property tax can be retroactive is three years. When that happens, homeowners get a hefty bill to pay in a small amount of time.
But that’s very rare, said Rose McLean, director of legal and policy support at the assessment corporation.
“Our goal at MPAC is to assess new construction within six months,” she said.
“We certainly try to ensure that no retroactive tax bills are going back three years,” McLean said.
But, she acknowledged, it happens occasionally and it usually happens when houses are entirely rebuilt. She couldn’t say how many homeowners have been billed retroactively for more than two or three years. But Labancz happens to be one of them.
He and his wife, Adrienne, a teacher at Rosedale Heights, bought their Etobicoke bungalow in October 2007 for $495,000. It had been rebuilt and the couple was told that they were still paying taxes on the house assessed at $230,000.
“We knew we could be looking at a serious sum of money and that’s why my wife and I called the City and MPAC every year, asking to adjust our taxes,” Labancz said. “We never got an answer and now, we have to pay this lump sum.”
The Labanczs, who are expecting a baby soon, say they are not complaining about the taxes or the amount — but the timeline. “Why would it take them three years?” Labancz asked.
The couple said they asked the City whether they could get an extension for payment or if they could pay in instalments but were turned down.
The City allows supplementary bills to be paid in two installments, said Cindy Bromley, manager for communications. “The City cannot adjust the due dates as set once the bills have been issued.”
More than 12,300 supplementary bills were mailed in the last cycle. These supplementary bills are sent out three or four times a year.
“This is the worst possible timing,” Labancz said. “We just paid up our regular property taxes.”