Bill 78, Property Tax Deferral Act, 2008

Versions

Bill 78 2008

An Act to provide property tax deferrals to low-income seniors and low-income persons with disabilities

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Definitions

1. In this Act,

"eligible owner" means an owner who is an eligible owner under section 3; ("propriétaire admissible")

"Minister" means the Minister of Finance or whatever other member of the Executive Council to whom the administration of this Act is assigned under the Executive Council Act; ("ministre")

"owner" means the person assessed as the owner of real property under the Assessment Act; ("propriétaire")

"principal residence" means premises that are occupied by an individual as the individual's primary place of residence; ("résidence principale")

"property taxes" means the amount of taxes levied on real property under the Municipal Act, 2001, the Provincial Land Tax Act and the Education Act; ("impôts fonciers")

"regulations" mean the regulations made under this Act unless the context requires otherwise; ("règlements")

"residential property class" means the residential property class prescribed under the Assessment Act; ("catégorie des biens résidentiels")

"spouse" has the same meaning as in Part III of the Family Law Act. ("conjoint")

Tax deferral

2. (1) An owner of property in the residential property class who is an eligible owner with respect to the property is entitled to a deferral of property taxes on the property for which the owner would otherwise be liable for a taxation year beginning after this Act comes into force if the owner makes an application for the tax deferral in accordance with this Act and the Minister approves the application.

Amount of deferral

(2) The amount of the tax deferral for an eligible owner for a taxation year shall not exceed $10,000, subject to such other amount as may be prescribed by the regulations.

Eligible owner

3. An individual is an eligible owner under this Act with respect to a property if the following criteria are satisfied:

1. The owner or the owner's spouse occupies the property as their principal residence.

2. The owner or the owner's spouse has been ordinarily resident in Ontario for not less than one year immediately before the date an application is made under this Act.

3. The owner or the owner's spouse is,

i. a Canadian citizen, or

ii. a permanent resident under the Immigration and Refugee Protection Act (Canada).

4. The owner or the owner's spouse is, at any time during the taxation year,

i. a person who is 65 years of age or older and who receives an income supplement under Part II of the Old Age Security Act (Canada), or

ii. a person who has a disability as defined in the regulations and whose income does not exceed the prescribed limits, as provided for in the regulations.

5. The owner or the owner's spouse has not less than 25 per cent equity in the property.

Application for deferral

4. (1) An application for a tax deferral under this Act shall set out the amount of the deferral and be made in the form and manner approved by the Minister.

Same

(2) The application must be given to the Minister by July 1 of the taxation year or by such other date as may be prescribed by the regulations.

Approval

(3) The Minister shall approve the application if the Minister is satisfied that the applicant is an eligible owner under this Act.

Notice

(4) The Minister shall give the applicant written notice of the decision whether or not to approve the application and the notice shall contain such information relating to the application as may be prescribed by the regulations.

Appeal

(5) The applicant may appeal a decision of the Minister to refuse an application in whole or in part and shall do so in accordance with the regulations.

Effect of deferral

5. (1) Despite any other Act, regulation or municipal by-law, if an amount is deferred by an eligible owner with respect to a property under this Act, no taxes are payable by the eligible owner with respect to the amount deferred until payment is due under this Act.

Same

(2) No penalty or interest is payable in relation to the amount deferred other than the interest payable under this Act.

Lien on property

6. (1) If an amount that is payable to the Crown under the Provincial Land Tax Act is deferred by an eligible owner under this Act, the Minister may register in the proper land registry office a notice claiming a lien on any interest the eligible owner or his or her spouse has in the property described in the notice.

Same

(2) If an amount that is payable to an entity under the Municipal Act, 2001 or the Education Act is deferred by an eligible owner under this Act, the Minister shall, on behalf of the entity, register in the proper land registry office a notice claiming a lien on any interest the eligible owner or his or her spouse has in the property described in the notice.

Amounts included and priority

(3) The lien conferred by subsection (1) or (2) is in respect of all amounts deferred under this Act at the time of registration of the notice and all amounts deferred afterwards while the notice remains registered and, upon registration of a notice of lien, the lien has priority over any encumbrance or other claim that is registered against or that otherwise arises and affects the property of the eligible owner or his or her spouse after the notice is registered.

Initiation of sale proceedings prohibited

(4) The Minister shall not initiate sale proceedings in respect of any property against which he or she has registered a lien under subsection (1) or (2).

Discharge of lien

(5) Within 10 days after the Minister has knowledge of the payment in full of the deferred amount, the Minister shall register a discharge of the notice of lien under subsection (1) or (2).

Payment due

7. (1) All amounts deferred under this Act become due on the earliest of,

(a) the death of the eligible owner, subject to subsection (3);

(b) transfer of the property, other than between the eligible owner and the spouse; or

Interest

(2) The amounts under subsection (1) shall be paid with interest as prescribed by the regulations.

Death of owner

(3) If the owner dies but the owner's spouse is still alive, the amounts that are deferred are not due as long as,

(a) the spouse is still alive;

(b) the property is still the spouse's principal residence; and

Death of owner's spouse

(4) If the owner's spouse dies and, but for the spouse's death, the owner would be entitled to a deferral of taxes if an application were made in accordance with section 4, the amounts that are deferred are not due as long as,

(a) the owner is alive;

(b) the property is the owner's principal residence; and

Offence

8. A person who knowingly makes a false or misleading statement to obtain a tax deferral under this Act to which he or she is not entitled is guilty of an offence and, on conviction, is liable,

(a) for a first offence, to a fine of not more than $1,000; and

(b) for a subsequent offence, to a fine of not less than $1,000 and not more than $5,000.

Regulations

9. (1) The Minister may make regulations,

(a) prescribing anything that must or may be prescribed by regulation;

(b) prescribing fees for applications made under section 4;

(d) prescribing rules pursuant to which an individual may appeal a decision of the Minister under this Act and restricting the matters about which an individual may appeal;

(e) respecting any matter considered necessary or advisable to carry out effectively the purposes of this Act.

Classes

(2) A regulation may create different classes, including different classes of persons, fees or payments, and may establish different entitlements or requirements with respect to each class.

Priority of this Act

10. (1) This Act applies despite provisions of the Municipal Act, 2001, or any by-law made under it, relating to property tax deferrals for low-income seniors or low-income persons with disabilities.

Same

(2) This Act applies despite provisions of the City of Toronto Act, 2006, or any by-law made under it, relating to property tax deferrals for low-income seniors or low-income persons with disabilities.

Amendment

11. (1) The definition of "property taxes" in section 1 of this Act is repealed and the following substituted:

"property taxes" means the amount of taxes levied on real property under the Municipal Act, 2001, the Provincial Land Tax Act, 2006 and the Education Act; ("impôts fonciers")

Same

(2) Subsection 6 (1) of this Act is amended by striking out "Provincial Land Tax Act" and substituting "Provincial Land Tax Act, 2006".

Commencement

12. (1) Subject to subsection (2), this Act comes into force on the day it receives Royal Assent.

Same

(2) Section 11 comes into force on January 1, 2009.

Short title

13. The short title of this Act is the Property Tax Deferral Act, 2008.

EXPLANATORY NOTE

A new statute, the Property Tax Deferral Act, 2008, is enacted. The new Act allows eligible owners to defer property taxes payable on properties used as their principal residences beginning in the taxation year after the Act comes into force. An individual is an eligible owner if he or she, or his or her spouse, is a low-income senior or a low-income person with a disability and satisfies the other criteria in section 3 of the Act.

To receive the deferral, the eligible owner must apply to the Minister of Finance by July 1 of the taxation year or by such other date as may be prescribed by the regulations made under this Act. The maximum amount that can be deferred in a taxation year is $10,000, unless otherwise prescribed by regulation.

If the deferred amount is payable to the province, the Minister may register a lien on the property that is subject to the taxation. If the deferred amount is payable to other entities, the Minister must register a lien on behalf of those entities. In both cases, the Minister must register a discharge of the lien within 10 days of his or her knowledge of the repayment of the deferred amount.

Taxes deferred under the Act must be repaid, with interest, on the earliest of: the death of the eligible owner, unless the property is still the principal residence of the surviving spouse; transfer of the property, other than between the eligible owner and his or her spouse; and July 1 of the first year for which the eligible owner is not entitled to a deferral under the Act.

It is an offence to knowingly make a false or misleading statement to obtain a tax deferral to which an individual is not entitled.

The Act has priority over provisions in the Municipal Act, 2001 and in the City of Toronto Act, 2006 that provide for property tax deferrals for low-income seniors and low-income persons with disabilities to be established under municipal by-laws.