Establishment of 2020 Tax Rates

As indicated previously, annual property tax rates are derived from the setting of tax ratios. In this regard there is an unlimited combination of movements that can be modelled either individually or in combination. Each scenario will result in a shifting of taxes amongst the property classes in varying degrees.

Administration begins the process with the first model, or Baseline model. It uses the 2020 Start Ratios which are calculated from the tax distribution resulting from the prior year tax rates and illustrates the tax rates that would apply for 2020 without any further adjustments. This year, Administration has chosen to not model any further tax ratio movements for reasons that follow:

2020 tax rates are based upon the final property assessment values resulting from the  previous four-year assessment cycle wherein properties were valued as at January 1, 2016. Prior to recent events, all properties in Ontario were to be subject to new property values as determined on or around January 1, 2019 beginning with the 2021 tax year through to 2024. Unlike previous reassessment cycles, the outcomes were expected to significantly impact property assessment values particularly in the residential property class due to the rise in home resale values over the past four years. Given the emergency declaration and COVID-19 circumstance this reassessment update has been placed on hold for the 2021 taxation year. In other words, the 2020 assessment values will continue to be used for purposes of the 2021 taxation year. No further information has been provided with regards to whether the market value date of January 1, 2019 will continue to be used going forward or if another valuation date will be set. Due to the fact that fluctuations in assessment values can negatively impact the starting point for future tax rate decisions no change is being recommended.

In the past two years, Administration has modelled in particular, a reduction of the multi-residential ratio to align with the new multi-residential ratio both as a one-time adjustment and as an adjustment over time. Windsor current ratio is at 2.0 which is at the threshold where there are no restrictions imposed on the tax class. As part of the 2019 tax policy, Administration undertook to monitor further changes to the multi- residential tax ratio in other municipalities and to report those changes to Council. According to the 2019 BMA study, the average tax ratio for the multi-residential tax class was 1.78 as compared to 1.79 in 2018. While there were some municipalities who continue to reduce their tax ratio for the multi-residential tax class towards 1.0, the decrease in the average can be attributed to a lowering of the ratios in those municipalities that were or remain above the 2.0 Provincial threshold and are therefore subject to further restrictions. As indicated in the report, Administration would not recommend any further changes in ratio for this property class this year. It is further noted that while the proposed tax ratio is recommended to remain at 2.0 that comparatively based on the most recent BMA study Windsor still remains (Appendix A).