If the grass you cut was really hay – would you get a lower tax rate? Developers take hay off vacant land and pay 1/5th the tax you pay.

By Pepper Parr

March 12, 2014

BURLINGTON, ON.

During the time of Jesus in first century Israel, there were tax collectors who could walk up to a man and tax him for what he was carrying.  These tax collectors were hated and despised because they were usually fellow Jews who worked for Rome. There were many taxes needed from the provinces to administrate the Roman Empire. These taxes paid for a good system of roads, law and order, security, religious freedom, a certain amount of self-government and other benefits.  The men who did this work were called publicans.

It isn’t all that much different today. The province of Ontario requires the municipalities to maintain roads and water treatment plants; we have to have a police force, we have to have a Medical Officer of Health who administers rules the province puts in place.

The city of Burlington levies taxes.  City council recently passed a budget that set a budget of $133,816,211 for current operations and $67 million for capital expenditures and determined that home owners will pay a tax of $12.78 for every $100,000 of property valuation.  That property assessment is set by MPAC – the Municipal Property Assessment Corporation..

Every property owners know what the taxes are on their homes – what most people don’t know is that different types of property pay a different amount of tax

Residential property is taxed at what they refer to as 1; which means they pay that $12.78 for every $100,000 of property assessment.

There are eight different classes of property:

Residential (1.0)

New multi-residential (2.0)

Multi-residential (2.26)

Commercial (1.45)

Industrial (2.35),

Farmlands (0.20)

Managed forests (0.25)

Pipelines, (1.06)

This Enbridge pipe line runs from border to border of the city – they pay .06 more on their assessment than you do for your house.  What is the pipeline asses at?  We don’t know that.

Those numbers in brackets represent the tax ratio rate, with residential always set at 1.  So for a property assessed at $200,000 that is residential that rate would be 2 x $12.78  a property that is classed Commercial the rate would be 2.35 x $12.78  assuming the same $200,000 assessment

This isn’t exactly the middle of a farm field is it. Land that could be taxed as commercial gets a farmland tax rate even if it is in the middle of town – all you have to do is cut the hay and bale it.

Take a look at that farmland rate and recall driving by one of those vacant lots on the South service Road where you may have seen round bales of hay that never seems to get taken away.  That property managed to get itself classes as farmland and all they have to pay is 0.20 of that $12.78  tax rate.  Now you know why developers can hang onto land and are patient while its value increases.  They get it classified as farm land, have someone cut what is really low, low quality hay and pay 1/5th of the rate you are paying for your property.

Those tax rates are set by the Regional government.  Burlington has seven seats on the 20 member council – but don’t expect our team to suggest a different tax structure for farmland held by developers or for that matter, land in those large estates north of 407.  Huge homes where people live in the lap of luxury – which is fine.  Heck they earned their money (didn’t they?) and if they can afford that kind of space good on them – but have them pay the same taxes as those poor shmucks in the suburbs south of Dundas.

Things used to better in Burlington; there was a time when the city levied a tax on telephone poles. “we can’t do that anymore” advised the Director of Finance.  There was a bit of a wistful look in her eye when she made that statement.

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3 comments to If the grass you cut was really hay – would you get a lower tax rate? Developers take hay off vacant land and pay 1/5th the tax you pay.

  • Greg Fabian

    This is good information. I am sure not many know that the residential rate is the lowest (except farm and forest), and that the commercial and industrial is so high.

    If I let my grass grow to a few feet (with my neighbours consent) and then buy a small tractor to mow it will I get the specialized tax rate at 1/5?

    I think there is confusion as the list provides one set of rates for commercial (1.45) and industrial (2.35) but the text has commercial at 2.35. So some clarification would help.

    Also the article has the taxes at $12.78 per $100K of assessment. However, the tax INCREASE is $12.78 per $100K, not the taxes.

    Here is some further context:
    The 2013 urban residential rate for municipal porton was 0.00371630. Therefore a $400,000 assessed value paid $1,486.52 to the City. The Region, hospital and the educators were given further $2,271.90. Total $3,758.42.

    What proportion the total tax revenue for the City is derived from each of the categories of taxpayers? I can’t seem to find that info.

    And one final thought, is it true that the tax increase are largely driven by the City, whereas the Region and School Board are keeping things in check? Please correct me if I am wrong.
    Editor’s note: It is always nice to have smart readers. Several have made a point about tax rates we listed and we will get back to our sources and get the clarification that appears to be needed. Thank you for reading and for the comments.

  • parrking

    A writer suggested we might have confused the numbers:
    A little confusion still because your list says “commercial (1.45), industrial (2.35)” then immediately after, your text say “a property that is classed commercial the rate would be 2.35 x $12.78.
    I’ve been an industrial ratepayer in Burlington for nearly 25 years and appreciate getting this information from the Gazette. The taxes that many of us in the ICI sector pay, we do so to the landlord as part of our “TMI” (taxes maintanance and insurance) when we pay our rent. Generally we are never given a breakdown of our taxes by the landlord and certainly not by the City. Some years ago, tennants would pay taxes directly to the City, however the City has since made it impingent on the landlord to collect and remit taxes.
    Thanks for your very enlightening newspaper. We are very fortunate to have it here in Burlington.

    Thanks for the compliment – we just passed on the numbers we got from city hall.

  • Tony Pullin

    I wonder if you have “commercial” and “industrial” rates transposed in your list?
    Editor’s note: Checked my source document – the numbers I published are what the city gave me.

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