Discussion:
Tax Policy Decisions
Property Tax Classes and Use of Optional Tax Classes
All properties in Ontario are placed into seven main property classifications being:
- Residential
- Multi-residential /New Multi-Residential
- Commercial
- Industrial * the City does not have taxable assessment in this property class
- Farmland
- Pipeline
- Managed Forest*
* the City does not have taxable assessment in this property class
In addition, municipalities have the ability to use Optional property classes which can be considered a sub-component of the main classes of commercial and industrial noted above.
Commercial (Main Class)
Industrial (Main Class)
- Commercial – residual Office Building Shopping Centre Parking lot/Vacant land
Industrial - residual Large Industrial
The use of optional tax classes is not new and came from the application of a business occupancy tax, which existed prior to 1998. The original decision to continue to use optional tax classes was required to be made in 1998 when the entire property tax system as we know it today was adopted and legislated by the Province. To date, the City of Windsor has continued to maintain all optional commercial and industrial tax classes although the differential in tax rate has been diminishing over time.
The choice to opt out of any or all of the optional classes does exist on an annual basis. By eliminating one or more of the optional classes, there is the possibility that there will be tax shifts as the class(es) eliminated essentially become one. In this regard, depending upon the magnitude of the tax shifts, Ministerial consent may be required. Once a decision to combine or eliminate the optional class(es) is made, municipalities cannot go back to using the optional classes.