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Ontario Tax - Assessment - 'Change of Status'. Toronto Standard Condominium Corporation 2279 v. Municipal Property Assessment Corporation
In Toronto Standard Condominium Corporation 2279 v. Municipal Property Assessment Corporation (Div Court, 2024) the Divisional Court dismisses a Municipal Property Assessment Corporation tax categorization decision and a further appeal of that to the Assessment Review Board, here involving the definition of 'hotel units' in condominiums.
Here the court considers Assessment Act 'change of status':1a: Did the Board err in its interpretation of “change of status” found in s. 45.3.1 (7) of the Regulation?
[23] TSCC 2279 argued that the declaration made by Talon ceased to be effective because when the 16 units were transferred to the two condominium corporations this amounted to a “change in status” under s. 45.3.1 (7) of the Regulation. It submitted that the transfer of the property thus revoked the prior declarations because this changed the “status” of the 16 units.
[24] The Board prefaced its interpretation of the Regulation by correctly referring to the rule of statutory interpretation from Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42 (CanLII), [2006] 1 SCR 715 at para. 26, that “the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.”
[25] The Board found that a change in ownership was not a “change in status of the unit” reasoning as follows:Second, the Appellant’s proposed interpretation, which would automatically cause a property to cease to be a hotel unit following a change in ownership whether or not MPAC is aware of that change, is inconsistent with the clear wording of the Regulation read in its entire context, particularly (6)(b) which creates a requirement to actively “optout” of the s. 45.3.1 valuation regime once the owner has told MPAC that its units are hotel units for the applicable and subsequent taxation years. Taken in context, the reference to “change in status of the unit since the declaration was made” in (7)(b) refers to any change in the status of the unit as a hotel unit since the declaration was made pursuant to 6(a) that the unit will be a hotel unit for the following and subsequent years, not a change in ownership. This is the most reasonable interpretation in light of the plain and ordinary meaning of the words, taken in the entire context. [26] I agree. There is no provision for any revocation of a prior declaration on transfer of the property. A unit’s “status” fits harmoniously with the definition of “hotel unit” within s. 45.1.3(1) and aligns with the purposes of applying the assessment methodology to condominium hotels:“hotel unit” means land,
(a) that is a unit or proposed unit as defined in the Condominium Act, 1998,
(b) that is furnished and operated or managed in a manner to provide transient accommodation for a fee or charge for a minimum period of less than 30 days, or that is used as part of the hotel operations, and
(c) in respect of which, for the 2008 and subsequent taxation years, the owner or his or her authorized agent has made a declaration under subsection (5) or clause (6) (a); (“partie privative”) [27] Thus, it is logical in this case for the 16 units’ “status” to be related to the definition of what constitutes a hotel unit for these purposes: that being condominium units for providing transient accommodation for a fee or that is used as part of the hotel operations and in respect of which the owner has made the required declaration for 2008 and subsequent tax years.
[28] This is consistent with the Board’s findings in Murphy v. Municipal Property Assessment Corp. Region No. 09, [2011] O.A.R.B.D. No. 230 at para 55 which held that where new owners acquire a declared hotel unit for personal use or seek to remove their declared unit from the regulation, a new owner must follow the Regulation’s opt-out procedure and deliver a declaration before June 30th for the following tax year.
[29] Further, as MPAC points out, the objectives of the provision which is to remove non-competitive tax treatment for condominium hotels would be frustrated if a sale of a hotel automatically revoked prior declarations and required a new owner to make a subsequent declaration because the tax treatment would not come into effect immediately by application of, s. 45.3.1 (6). A unit purchased after June 30th would need to file a new declaration to opt-in yet not get the benefit of the Regulation until the year after the declaration is filed. I agree that this outcome would disrupt the legislative objectives of the methodology in s. 45.3.1.
[30] I conclude that the Board’s interpretation of the issue of “change of status” was correct and accorded with principles of statutory interpretation.
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