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ARTICLE · 07 OCTOBER 2013

Highest And Best Use Property Tax Increases

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Owners or tenants of commercial/industrial property in Ontario should be aware of recent increases in property tax assessments made by Ontario’s assessing authority, the Municipal Property Assessment Corporation.

CanadaTax
Stephen Longo
Stephen Longo
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Owners or tenants of commercial/industrial property in Ontario should be aware of recent increases in property tax assessments made by Ontario's assessing authority, the Municipal Property Assessment Corporation (MPAC).

Especially in the City of Toronto, MPAC is valuing many properties on the basis of their "highest  and best use" (HABU) rather than their actual use.These assessments have led to some significant property tax increases. For example, some owners of retail/office properties have seen their taxes more than double because MPAC has determined that the property's HABU is something other than its current use.

HABU is an appraisal concept that focuses on the "reasonably probable use" of a property that is fiscally possible, appropriately supported, financially feasible, and produces the highest property value. All four of these "tests" must be satisfied in order for a property's true HABU to be determined.

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