The municipalities may have made an error in charging the extra school tax to developers.
The School Tax Act states that an owner of “dwelling property” must, for a taxation year, pay additional school tax (AST) in addition to regular school tax as follows:
- The tax rate will increase by 2 on values between $3-$4M
- The tax rate will increase by 4 on values over $4M
“Dwelling Property” means the following class 1 property (as per clause 117.1 of the School Act):
- Land that is outside the agricultural land reserve and that is determined by the assessor to have no present use.
- Land and improvements on the land, if:
- Any of the improvements are used or intended to be used as a residence for 3 or fewer families. Hence, if you have houses that have more than 3 units, then you should be exempt.
The question under debate is the definition of “no present use.” Our contention is that a property bought by a developer or potentially by an entity that proposes to develop, has use.
Conclusion
If you have any development sites worth more than $3,000,000, please send your assessment notices to me and we can discuss launching an appeal, or call me at 604-733-3282.