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. 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:[3] The appellant is Toronto Standard Condominium Corporation 2279, the minority owner of the 16 subject units. TSCC 2279 argues that the Board erred in law in its interpretation of the Regulation and erred by upholding an assessment which results in double taxation on the 16 units, leading to an improper benefit to the respondent City of Toronto. It seeks to set aside the Board decision and an order that the assessed value of the 16 units be fixed at a nominal amount.
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Standard of Review
[7] An appeal from the Board is available only on a question of law. Leave to appeal was granted on January 5, 2024: Toronto Standard Condominium Corporation 2279 v. Municipal Property Assessment Corporation, 2024 ONSC 12 (CanLII),
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[11] The starting point for the issues on appeal is the declaration by the former owner concerning the 16 units. On June 29, 2010, the prior owner of the St. Regis, Talon International Inc. o/a Trump International Hotel & Tower, filed a statutory declaration with MPAC stating that the 16 units would be “a hotel unit as defined in section 45.3.1 of Ontario Regulation 282/98 as amended.” The declaration was for the 2011 tax year and subsequent tax years.
[12] Section 45.3.1 permits an owner of a condominium hotel to designate as “hotel units”, units that are “used as part of the hotel operations”. Section 45.3.1(2) and (3) specify how condominium hotels are to be valued. This is a legislative measure that was put in place to avoid unfairness to condominium hotels in assessing value for municipal taxation as compared to non-condominium hotels.
[13] The relevant portions of s. 45.3.1 read as follows:CONDOMINIUM HOTEL VALUATION
S.45.3.1 (1) In this section,
“condominium hotel” means a building complex,
(a) that contains at least 20 hotel units, and
(b) that is not located within the boundaries of a resort; (“condominium hôtelier”)
“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”)
“resort” means a building complex that is occupied primarily for recreational purposes, including golfing, skiing, swimming and hiking. (“lieu de villégiature”) O. Reg. 538/07, s. 1.
(2) For the purposes of subsection 19 (2.1) of the Act, the current value of a hotel unit that is contained in a condominium hotel for the purposes of assessment for 2006 and subsequent taxation years shall be determined by using the pro forma income capitalization approach to valuation to determine assessments that are comparable to the assessments of hotels of similar size and quality in the vicinity of the condominium hotel. O. Reg. 538/07, s. 1.
(3) For the purposes of subsection (2), all hotel units shall be deemed to be a single parcel of land for valuation purposes and the value determined shall be apportioned among the hotel units in the proportion that the square footage of each unit is of the total square footage of all hotel units contained in the condominium hotel. O. Reg. 538/07, s. 1.
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(6)For the purposes of assessment for 2009 and subsequent taxation years, the owner of a hotel unit that is part of a condominium hotel or his or her authorized agent shall make a declaration on or before June 30 of the previous taxation year to the assessment corporation stating that,
(a) the unit will be a hotel unit for the following and subsequent years; or
(b) the unit will cease to be a hotel unit for the following and subsequent years. O. Reg. 538/07, s. 1.
(7) Despite subsection (6), no declaration is required where,
(a) a declaration was previously made under subsection (5) or (6); and
(b) there has been no change in the status of the unit since the declaration was made. O. Reg. 538/07, s. 1.
(8) The assessment corporation may determine the manner in which a declaration under subsection (5) or (6) is made. O. Reg. 538/07, s. 1. ....
[18] Although only one tax bill is delivered for the hotel units, each of the 16 units that were the subject of the declaration have their own roll number and are “allocated” a share of the assessment value based on square footage as a notional amount of tax that is assigned to each unit. For example, the truck access room, property code 190406301000348, is shown as having a value of $1,451,000 out of the total assessed value of the hotel of $75,899,000 based on its proportional square footage.
[19] In contrast to the formula used to value condominium hotels found in s. 45.3.1, residential condominium owners pay residential tax rates on their units which are assessed individually, based on a current value assessment as provided in s. 19(1) of the Assessment Act R.S.O. 1990, c A.31.
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