Apparently not all property taxes are created equal when they are applied to municipal properties.
At a recent Wellington North meeting, councillor John Matusinec questioned the municipality’s payment of property taxes by the township’s water and sewer department – specifically in regard to local sewage treatment plants and water wells.
Treasurer John Jeffrey had requested a week to provide a proper answer for council. He said there is a bit of a difference. In his report, he described them as “payments-in-lieu” of property taxes.
He said all properties are identified by the Municipal Property Assessment Corporation and then classified according to use – for the purpose of levying property taxes.
Properties owned by municipalities, the province, the federal government, and related agencies are classified as either exempt or eligible for payments in lieu.
In either case, all properties are still assessed by MPAC.
He explained the justification behind the move is that those properties require and expect the same availability of local municipal services as private or commercial properties. Those services are provided by local and county levels of government.
As a result, payments in lieu are calculated in the same way as other property taxes, with the application of tax rates on other commercial properties. Further, Jeffrey added that the Assessment Act provides the authority to levy payments in lieu on township sewage plants and wells, defining them as utilities. He noted payments in lieu are used in a municipality’s calculation of its overall tax rates.