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HomeMy WebLinkAboutZurich Citizens News, 1976-08-04, Page 3-77 Jack Riddell The Provincial Government has established a Commission to review the Proposals for Tax Reform which were contained in Budget Paper E of this year's Provincial Budget. This Com- mission is conducting a series of meetings throughout the ' Province this summer and fall, before submitting its recom- mendations to the Government. Its Budget Paper E, the Govern- ' ment gave a brief review of the background of, and reasons for, market value assessment, which may be of interest. According to this government review: - "The values upon which taxes are currently levied date as far back as 1940. They are values which were determined by local assessors taking into account factors which were important to each municipality but not necessarily important beyond the boundaries of each. "During this period, Ontario Citizens News, August 4, 1976 -Page 3 Comrnission reviews fax reforms experienced rapid urbanization. and inequities grew within each municipality as new properties were brought onto the assessment roll and the values of older properties were not up- dated. "Meanwhile, the sharing of costs and responsibilities among municipalities, and between municipalities and the Province, steadily increased in importance. As provincial grants were in- creased over the years, local and provincial financing became more interrelated. Because the locally -determined property assessment was the basefor sharing many costs and deter- mining grant entitlements, deficiencies in local assessment obviously created inequities in provincial -municipal financing. "The Province adopted a system of equalization factors to correct for the variations in local property' assessments. At best, however, these factors could correct only in the total sense for different growth patterns and valuation practices. The factors could not account for changes in the values of individual properties. "It was due to these cir- cumstances that the Province assumed the responsibility for the administration of property assessment. The Province was immediately faced with the task updating the assessments on more than 3.5 million properties in Ontario. "Initially, completion of the reassessment program was planned for December 1975 for 1976 taxation. However, in a relatively short period of time, the real estate market in Ontario became extremely active with prices rising at unprecedented and unexpected rates. "These conditions caused values placed on properties to be hopelessly out of date within' several months, making meaningful tax analyses im- possible. Therefore, the schedule for ' the implementation of reassessed values was delayed until the 1977 tax year. "The Province has almost completed the reassessment of all properties in Ontario. It is intended that once market value is established, it will be kept up to date. "The use of ` property taxation will continue to be the exclusive right of local governments and the main source of their tax revenues. The property tax has proven to be a good tax for the raising of local funds. No other level of government uses property as a tax source. "Furthermore, local govern- ments have considerable flexibility in setting mill rates in accordance with their financial requirements. With the in - ROCK AGE SPECIAL — Winner in one of the categories in Saturday's Friedsburg Days parade Ain Dashwood was the Flintstone Special manned by Steve and Freddy Miller. photo. Property tax CONTINUED FROM PAGE 1 snowmobilers, possibly with some justification, could demand access for these recreational activities, because part of these taxes comes from their pockets: The division of taxes through ability to pay would be an added inequity under the proposed system, as Landowners with a large land area and a small house, presumbably would pay lower taxes than the small far- mer with a large house. Churches provide a real ser- vice to any community through their endeavors in the main- tenance of the moral values of our people. To tax them on their property could mean that some churches that are now struggling to remain viable would have to close, This could result in higher cost to the taxpayer through an in- crease in vandalism and other delinquencies. The increase in tax revenue would be un- doubtedly more than offset by the increase in cost in other areas. Schools, Universities and hospitals are now for a great deal maintained by the levies on municipalities through local taxes. If a property tax is levied on these institutions, it will only mean that the tax levies of the benefitting municipalities have to be increased. What then is the benefit if on the one hand tax income to the municipalities is increased and on the other hand it is taken away? It will be like moving money from the right pocket to the left pocket with the extra cost of more administration. Having the full hundred per- cent of taxpaid by owners of farmland who do not use the land for farming will not help to keep farmland in food production. The speculator will simply do some token farming and when the land use changes and he has to pay back the taxes the government has been paying for him in the last ten years, he can look back on having had the use of the tax money at the low interest of eight percent. It could even be an in- troduction of the property tax credit system which virtually eliminated the regressive features of the tax, the revenue - raising capacity of property taxation has been greatly enhanced. "During this period of reassessment, the Province has also been analysing the effects of the new values on the distribution of taxes among taxpayers and on municipal finance. The development of a compatible property tax system for in- troduction with market value assessments is fundamental to a pragmatic program of reform." The Government's Proposals for Reform of Property Taxation in Ontario are intended to establish an appropriate distribution of tax burdens among classes of real property, to achieve a more neutral business assessment rate; and to broaden the local tax base by removing exemptions. Under the proposals, residences in Ontario, collec- tively, would bear a reduced share of property taxes and residential property would be redefined to include only residences and a reasonable amount of land. The current practice of levying different mill rates on residential and com- mercial properties would be discontinued. Farmland, farm buildings, managed forests and farm residences would be assessed at market value. Farmland, farm buildings and managed forests would be taxed at 100 percent of market value and the taxes would be paid by the Province. Farm residences would be taxed as all other residences at 50 percent of market value and the taxes paid by the owner. There would be provision to recover taxes paid by the Province if the property changes use. All real property used for the purpose of a business including government administrative facilities would be subject to an additional assessment of 50 percent of market value for business taxes. I will report further on the Government's Proposals for Reform of Property Taxation ins Ontario, and shall be interested to hear any comments and views on this subject. ducement for land speculation. We are of the opinion that farmland should be taxed at a percentage of market value tied to the productive value. The farmer is perfectly willing to pay taxes as anyone else. His return on his production should be such that he can pay his taxes. To have CONTINUED ON PAGE 6 zaerry rads Fashion Boutique GRAND BEND SUMMER CLEARANCE 1 1/4 miles south of traffic light on Highway 21 ROBERT WESTLAKE INSURANCE Specializing in GENERAL INSURANCE 236-4391 ZURICH J.E. LONGSTAFF OPTOMETRIST SEAFORTH— TEL: 527-1240 TUES., THURS., FRI. 9:00- 5:30 WED., SAT. 9:00 - 12:00 CLINTON— TEL: 482-7010 MONDAY 9:00-5:30 BY APPOINTMENT Norman Martin OPTOMETRIST Office Hours: 9-12A.M.-1:30-6p.m . 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