Take Control of Your Property Taxes: Five Tips for 2025
Did you know that despite property assessments in Ontario being based on 2016 market values, the Municipal Property Assessment Corporation (MPAC) added more than $5.7 billion in value to the business assessment base this year?
This surprising fact underscores a key reality for property owners: even in a seemingly stagnant assessment environment, your property taxes can still change—and not always in your favor.
Since Ontario suspended reassessments in the early days of the pandemic, the province’s property taxes have continued to be based on market values as of January 1, 2016. With no change in assessments for the past nine years, taxpayers may not be paying close attention to assessment notices and appeal deadlines. However, individual assessments may still change. MPAC added more than $5.7 billion in value to the business assessment base this year, some of which relates to changes in existing properties, in addition to new construction.[1] If you aren’t paying attention, you risk missing an opportunity to reduce your property taxes for 2025—and you could be shocked by changes on the horizon.
As operating costs for municipalities have risen sharply over the past few years, property tax rates have followed suit. For example, Toronto raised tax rates by 8% in 2024 and is forecast to raise them by 6.9% in 2025. Increasing the assessment base can help offset these increases, and as a result, MPAC has been under pressure to find new value to assess.
How can taxpayers take control? Owners and tenants of business properties in Ontario should ensure they aren’t paying more taxes than they need to today—and avoid being caught by surprise tomorrow.
Ryan’s Top Five Tips:
- Check notifications: An assessment notice means your value may have changed
- Look closely: Changes in assessed values may not be correct or fair
- Size up the competition: Is your assessment higher than that of similar properties?
- Don’t miss your chance: The deadline to appeal is March 31
- Be prepared for what’s next: What to expect from a reassessment
1. Check notifications: An assessment notice in late 2024 likely means a value change for 2025
For the 2024 taxation year, MPAC added new assessed value across all property classes of $42.7 billion—up from $42 billion in 2023. $3.1 billion of new value was added to properties in the commercial class (which includes distribution centres and warehousing) and $2.6 billion was added to the industrial class (which includes manufacturing, producing, and processing facilities).[2] This is a significant increase, especially considering that market values remain at 2016 levels and construction has slowed in recent years.
In Ontario, after the first year of an assessment cycle, assessment notices are typically only issued when there has been a change in the status of a property or a change in ownership. A Property Assessment Change Notice (also known as a supplementary or omitted notice) can be issued at any time during the year if there is a change in classification or value. Regular notices of assessment are issued in the fall but are only required to be issued if the assessed value has changed. Notices for the 2025 taxation year were mailed out in November 2024.
2. Look closely: Changes in assessed values may not be correct
MPAC is authorized by legislation to increase the assessed value of property for the current year and up to two prior years. Most property owners prefer to have assessments issued in advance rather than retroactively, but in some cases, value should not be added at all. Recent examples involving incorrect property assessment change notices identified by Ryan consultants include:
- Owners of development land being farmed received notices removing the rebated farmland tax class, resulting in a 500% increase in tax liability. MPAC had observed machinery on site and erroneously determined that farming activity had been discontinued.
- An industrial mall received a notice indicating a $500,000 increase in assessment value because of an “improvement.” The “improvement” was a new retail tenant that had moved into space previously occupied by a different retail tenant, which did not support a change in value.
- An office owner received a notice indicating an additional value of more than $1,000,000. Investigation revealed that the increase reflected the value of building permits, which had been taken out for repairs required to maintain the property or correct deficiencies, which should have resulted in no change to the assessment.
- An assessor misinterpreted rental data and added leasable area when units had been subdivided or renumbered.*
*Note: Some details have been changed to maintain client confidentiality.
Whether you have received a regular annual Notice of Assessment or a Property Assessment Change Notice, there has almost certainly been a change in the assessed value or tax classification for your property. Make note of the deadline to appeal and review the assessed value to confirm whether the change is warranted.
3. Size up the competition: Is your assessment higher than that of similar properties?
Currently, assessments for most Ontario properties are much lower than current selling prices, as valuations reflect market conditions from nine years ago. To ensure you are not paying more than your fair share of taxes, you should also consider how similar properties have been assessed, as Ontario property assessment legislation requires that assessments be equitable.
For example, if your property is currently achieving rents of $15 per square foot, but the assessment is based on rents of $7.50 per square foot, your assessment is likely lower than current market value. However, if comparable properties are assessed based on rents of $6.00 per square foot, you may have grounds to have the assessed value reduced to the same level.
If you are a property owner and don’t appeal your assessment to ensure it is equitable with competing properties, in addition to paying more than your fair share, you run the risk of losing tenants to properties with lower occupancy costs.
4. Don’t miss your chance: The deadline to file is March 31
To take control of your 2025 taxes, you must file an appeal or Request for Reconsideration by March 31, 2025. Ontario taxpayers—both owners and tenants—have the right to appeal their assessments each year. Appeals are filed with the Assessment Review Board, which charges a fee of $318 plus HST for business properties, while reconsideration requests (essentially informal appeals) are filed with MPAC and do not require a fee. A reconsideration request must include details on why the assessment is incorrect and the revised value sought. Tenants cannot file a Request for Reconsideration, and if a tenant files an appeal, the legislation requires that they notify the property owner.
If you receive a Property Assessment Change Notice, you have 90 days to file an appeal or Request for Reconsideration. The deadline will be printed on the notice.
5. Be prepared for what’s next: What to expect from a reassessment
The next provincial reassessment could be announced at any time, and it is possible that new assessed values could be implemented for the 2026 taxation year. Ryan’s analysis of market value changes indicates that assessments for light industrial properties are likely to increase substantially. For example, a review of 130 property sales in the Greater Toronto Area (GTA) indicated that, on average, industrial property types were assessed at just over 30% of their 2022–2023 selling prices. This means that a general reassessment could result in new property assessment values that are two to three times current assessed values. Industrial and commercial development land could face even greater increases.
Source: Ryan data – 130 GTA sales in 2022/2023.
Ontario’s assessment legislation requires that increases in assessed value be phased in over four years, while decreases are implemented immediately. As the chart above illustrates, all classes of business properties are currently assessed at less than 100% of recent market values. As each year’s increases are phased in, the rising value of the business assessment base is expected to result in a downward shift in tax rates to compensate for the significant change.
Upon reassessment, a property with an increase that is higher than the average is likely to see an increase in property taxes. Conversely, a property with an increase that is below the average will see lower property taxes as a result of the reassessment. Since the value change for industrial properties and development land will be much greater than the overall average value change, significant tax increases are expected.
Property tax is the largest single operating expense for most properties. Even when it seems like not much is happening, having an expert review your property or portfolio can pay off with substantial tax savings and help avoid potential future shocks.
[1] Municipal Property Assessment Corporation, “2024 Roll Return Fact Sheet”, January 16, 2025 (https://www.mpac.ca/en/News/FactSheet/2024RollReturnFactSheet).
[2] Ibid. Overall, if you are an Investor, Landlord, Owner-Occupier, or Developer of commercial property in the GTA, then you should engage with a property tax professional.
Jason Crane
Senior Leadership, Acquisition
jason.crane@ryan.com
Sandi Prendergast
Director of Research, Tax
sandi.prendergast@ryan.com