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Everything you need to know about your MPAC assessment as a homeowner

July 5, 2022
4 mins
Woman works on her tablet in her living room

If you’re an Ontario homeowner, every four years an envelope arrives in your mail from the Municipal Property Assessment Corporation (MPAC) telling you the value of your property.

This information is important because not only does it give you a snapshot of how much your home is worth, the MPAC assessment is also used to calculate your property taxes.

What is MPAC? 

The Municipal Property Assessment Corporation is an Ontario-based not-for-profit organization that tracks and reports information on more than five million properties in the province.

Funded by all the municipalities in Ontario, MPAC provides property values to taxpayers, businesses, governments, and municipalities. Municipal governments then use those numbers to calculate your property taxes.

So, if your home is worth $1 million, then your property taxes will be based on the municipality’s calculation of your home’s value, as well as the municipal and education tax rates. For example, here are Toronto’s property tax calculations for various types of properties.

If the value of your home has gone up, so will your property taxes. If it drops, you will pay less tax.

What’s included in your MPAC assessment?

When you get your MPAC assessment, you’ll see the following:

  • Your property’s assessed value
  • Your roll number
  • The location and description of your home
  • Your municipality or local taxing authority
  • Property classification: residential or business
  • School support: either the public or separate school boards

You will also see the property summary, which covers details of your property including the type, size, square footage of the buildings on it, the year they were constructed, and an overview of key factors that were considered in the assessment.

Also included is the change in the value of your property since the last assessment.

How does MPAC calculate the value of your property? 

MPAC has three approaches to calculating the value of properties:

  • Direct comparison approach, which analyzes recent sales of comparable properties in your area. This is used for residential properties, including condominiums. It also includes vacant land.
  • Income approach. This is for businesses and the value is tied to the property’s ability to earn revenue. MPAC analyzes the property’s income and expenses and compares that to similar properties. It then looks at the relationship between income and sale prices and calculates the capitalization rate, which is the rate of return on the property based on the income it can generate. Properties that fall under this category include malls, office buildings, and hotels.
  • Cost approach is used when a property doesn’t fit into either a residential or business category. Think gravel pits, grain elevators or warehouses. Since there aren’t that many comparables available, MPAC looks at the cost of replacing the taxable structures on the property, applies a depreciation deduction, and then adds the value of the land to the overall property value.

For residential properties, MPAC’s valuation includes:

  • The age of the property
  • The size of the home structure
  • The location of the property
  • The size of the lot
  • The quality of construction

What time of year do MPAC assessments happen?

Usually, your MPAC assessment happens every four years, but since November 2021, the province has postponed the assessment due to the COVID-19 pandemic. That means that the 2022 and 2023 property tax years will be based on January 2016 current values.

This may be why the assessed value of your home may be lower than the current value of the properties selling in your area.

Do you need to do anything to prepare for the MPAC assessment?

No, but if you disagree with your property’s assessment, you can dispute it by filing a Request for Reconsideration. You can provide updated information that may help with a more accurate assessment.

One final note about the MPAC assessment: it doesn’t affect your home insurance costs, so the value of your home won’t affect your home insurance rate. However, your home’s replacement value (i.e. what it would cost to replace it altogether if it were destroyed in a fire, for instance) does matter to insurance companies and will affect your annual premium.

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Renee Sylvestre-Williams

Renee Sylvestre-Williams is a finance and business reporter. In her more than 10 years of journalism, her work has been published in the Globe and Mail, Flare, Canadian Living, Canadian Business, the Toronto Star and Forbes. She also publishes a biweekly newsletter, The Budgette, where she provides financial education for single earners.

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