Parcels taxes are local government taxes levied based on the unit, frontage, or area of a property. Parcel taxes are distinct and separate from the property value taxes, which are levied on the assessed value of a property.
A parcel is a designated area of land (i.e. a lot registered with the Land Title Survey Authority, or a folio from the property assessment roll) that does not include a highway. For example, a residential land lot and the home on that lot may represent one parcel.
A parcel tax may be imposed on the basis of a single amount for each parcel (unit), the taxable area of a parcel, or the taxable linear frontage of the parcel.
Local governments cannot use parcel taxes to recover costs for general administration.
Application of Parcel Tax
A parcel tax may only be levied on properties that are currently receiving (or have a reasonable opportunity to receive) a specific service.
For example, if a water line affronts a property and the property is not connected to that line, that property may still be liable to pay a water parcel tax because it has the opportunity to connect. This may also apply even if there this no water line and there is a firm plan to build a water line within a reasonable timeframe. If that property cannot be serviced by the water line, the parcel tax must not be levied on that property.
Normally, a parcel tax is levied in conjunction with a user-fee. For example, a local government will often recover the fixed capital costs (for infrastructure) through a parcel tax and the operating costs through a user-fee (e.g. water metre charge).
The bylaws required to establish a parcel tax scheme must identify the service (e.g. water), state the basis of the tax (i.e. unit, frontage, or area), and specify the years for which the tax is imposed. In addition, if the basis for taxation is frontage or area, the bylaw must establish how the taxable area or the taxable frontage of a given property is determined.
The local government must make available to the public, on request, a report showing how the amounts or tax rates were determined.
Parcel Tax Roll
As the basis of levying a parcel tax, a local government must create a parcel tax roll. The roll lists the parcels to be taxed, including the name and address of the owners (or holder of a registered charge) of each parcel. Once prepared by the local government, the parcel tax roll must be available for public inspection. If requested by an owner, the local government must omit or obscure the address, or other information about the owner, in order to protect their privacy or security.
Parcel Tax Review Panel
A municipal council must establish a review panel to consider any complaints about the roll and to authenticate it. A person may make a complaint to the review panel regarding an error or omission concerning:
- A name or address on the roll
- The inclusion of a parcel on the roll
- The taxable area or frontage of a parcel on the roll
- A tax exemption being improperly allowed or disallowed on the roll.
The local government tax collector must send each owner a notice of the date for the sitting of the review panel.