Post-Closing Property Tax Surprises for Newly Constructed Homes

Purchasers of newly constructed homes are often surprised to receive after closing omitted or supplementary property tax bills. They are issued because between annual assessments of property values, properties continue to change. For example, new homes are constructed, owners renovate, additions are built and the uses of properties change. The change in the current value assessment or classification of properties enables the City to levy additional property taxes. These tax bills often amount to thousands of dollars that the purchaser often did not include in their budget for closing costs and may be issued as long as three years after purchase. Those purchasing a property within three years of the completion of a newly constructed home from an earlier purchaser of the property may also face reassessment property taxes.

Thus, when buying a newly constructed home, it is wise to begin setting aside some money as soon as possible in anticipation of the City’s reassessment. To resolve assessment concerns, you may also wish to take these steps:

1. Contact Municipal Property Assessment Corporation (“MPAC”) to verify details about your property, ask questions about your property’s current value assessment or request information about other similar properties.
2. If you believe that important information may not have been considered when the current value assessment for your property was determined, you may wish to have MPAC review it through the Request for Reconsideration process.
3. You may also file an appeal with the Assessment Review Board, an independent, adjudicative tribunal of the Province of Ontario reporting through the Ministry of the Attorney General, if you believe your property was incorrectly assessed or classified.

Download the PDF: Concepts Newsletter – Fall 2009