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Corporate Policy & Procedure
Effective Date: January 1, 2025
Township of Bonfield Tax Policy
SCHEDULE "A" TO BYLAW 2024-66
1. Purpose
The Township of Bonfield (the "Township") collects taxes on behalf of the Township and
the local school boards and is responsible for ensuring all overdue Property Taxes are
collected in a timely and systematic manner.
The purpose of this policy is to establish the responsibilities, internal controls,
authorizations, and procedures ensuring the timely, accurate and efficient preparation and
collection of property taxes.
2. Scope
This policy covers all aspects of billing and collection of overdue Property Taxes, up to and
including the initiation of Municipal Tax Sale proceedings. All procedures related to
Municipal Tax Sale are carried out in accordance with the authority from Section 286 of the
Municipal Act, 2001, which states that the Treasurer is responsible for invoicing, collection,
and reconciliation of all amounts payable to the Township.
3. Legislative Authority
This policy is written in compliance with the Municipal Act, 2001, (the Act), related
Ontario Regulations made under the Act and applicable Municipal by-laws, as amended
from time to time. Where this policy contradicts legislation of the Province of Ontario or the
Government of Canada, the legislation shall be followed.
4. Definitions
For the purposes of this policy:
Cancellation Price: an amount owing equal to all Tax Arrears, together with all current
taxes owing, Penalties and Interest and cost incurred by the Township after the registration
of a Tax Arrears Certificate under Section 373 of the Act.
Collection Costs: means all costs incurred by the Township to obtain information for
collection purposes and/or collect tax arrears including, but not limited to, title search fees,
corporate search fees, registered or certified mail, administrative charges, legal costs, and
tax sale costs.
Extension Agreement: a contract between the Township and the owner, spouse of the
owner, a mortgagee, or a tenant in occupation to extend the period of time in which the
Cancellation Price is to be paid. The contract is entered into after the registration of a Tax
Arrears Certificate and before the expiry of the one-year period following the registration
date.
MPAC: Municipal Property Assessment Corporation
Municipal Tax Sale: the sale of land for Tax Arrears according to proceedings prescribed
by the Act and Ontario Regulation 181/03.
Penalties and Interest: amounts applied by the Municipality to unpaid Property Tax
accounts, in accordance with Section 345 of the Act and appliable Township by-laws.
Property Taxes: the total amount of taxes for municipal and school purposes levied on a
property.
Property Taxes may include other amounts added to the tax roll as may be permitted by
applicable Provincial legislation, including but not limited to outstanding fines under the
Provincial Offenses Act; outstanding penalties under the Administrative Monetary Penalty
system; charges pursuant to the Property Standards By-law with authority provided by the
Building Code Act; and fees and charges related and authorized by Township By-laws.
Tax Arrears: any portion of Property Taxes that remain unpaid after the date on which they
are due.
Tax Arrears Certificate: a document that is registered on title, indicating the described
property will be sold by public sale if all Property Taxes are not paid to the municipality
within one year of the registration of the certificate.
5. Accountability
The Treasurer, and Finance Department are responsible to ensure that outstanding Property
Tax collection processes are performed in accordance with this policy and all applicable
legislation.
In addition, the Treasurer, or delegate, is responsible to:
- Ensure this policy remains consistent with current legislation.
- Ensure applicable staff are aware of this policy and trained accordingly.
- Communicate any policy revisions to applicable staff; and
- Assess overdue Property Tax accounts to ensure tax collection processes are
performed in accordance with this policy.
6. Policy
Billing, Payments, and Delivery of Tax Bills
Property tax bills will contain all required information as stated in the Municipal Act, and
any other information deemed necessary. Where allowed by legislation, and where
available, provision of tax bills, arrears notices, and other related correspondence may be
provided electronically.
The Township will strive to provide taxpayers with more than the minimum notice
requirements of 21 calendar days as set out in the Municipal Act.
It is the taxpayer's responsibility to notify the Township in writing of any mailing address
changes. Section 343(6) of the Municipal Act, 2001, identifies that property tax bills shall
be sent to the taxpayer's last known residence or place of business or to the premises where
the taxes are payable, unless the taxpayer directs otherwise. This direction continues until it
is revoked in writing.
Any tax bill, arrears notices, or other related correspondence sent by ordinary mail, is
considered delivered to and received by the addressee within five (5) business days unless
the notice is returned by the Post Office.
Failure to receive a tax bill does not exempt a taxpayer from paying the taxes, penalties and
interest added as a result of late payment.
Billing - Interim
As provided in the Municipal Act, each property owner, identified on the returned
assessment roll, shall be mailed an interim tax bill. The interim bill shall represent up to
fifty percent (50%) of the previous year's taxes billed. This interim bill shall be mailed by
the end of February. The due date will be the last business day of March.
Participants in the monthly pre-authorized payment program will receive a notice in
December advising them of their new monthly payment withdrawal for the upcoming year.
Billing - Final
After completion of the annual budgetary process, and the setting of tax ratios and rates, a
final bill shall be mailed to each property owner identified on the returned assessment roll at
the address indicated on file. The final tax bill shall be levied taxes for the year less the
interim bill. This final bill will be mailed by the end of July. The due date will be the last
business day of September.
All participants in any pre-authorized payment program will receive a tax bill with a note on
the bill that they are a participant in a pre-authorized payment plan and that the bill is for
information purposes only. A letter indicating the revised amount for their monthly payment
withdrawal from their account will be included.
Supplementary
After receiving notification from the Municipal Property Assessment Corporation (MPAC),
tax bills shall be calculated, printed, and mailed to each property owner identified on the
supplementary/omitted assessment notification listing from MPAC.
Participants in the monthly pre-authorized payment program will receive a note advising
that they must pay the supplementary bill over and above their current monthly payment
plan or contact the Township in writing to amend their pre-authorized amount to include
this billing prior to the end of the calendar year. Note that the supplementary bill may be
processed closer to the end of the year and there may not be sufficient time to accommodate
a monthly payment plan.
Mortgage Company
A mortgage listing of roll numbers, taxes due and owing and the due dates, in standard
format will be provided to each mortgage company who has provided the Township with
notification that they hold an interest in a particular property.
Property Tax bills and notices are mailed to the address of the property as shown on the tax
roll unless the taxpayer advises the Township, in writing, of an alternate mailing address.
Use of the alternate mailing address continues until it is revoked in writing or ownership of
the property changes.
Payments
Payment of taxes must be received in the Township's administrative office on or before the
due date. The following are the modes of payment that are available:
a) In person, at the counter or drop box at the Township office
i.
Cash, cheque, or credit card (1.5% surcharge)
ii.
Post-dated cheque(s)
b) Municipal Pre-authorized Payment Plan
c) Telephone, E-Transfer or Internet Banking - using the nineteen-digit roll number as the
account number.
d) Credit Card on the Municipal Website (2.5% surcharge)
e) Payment through a mortgage holder.
Note that payments made by telephone or internet banking may not be received by the
Township for at least three (3) business days. Payment made using these methods should
incorporate sufficient time in advance of the due date.
Receipts will be provided for all cash or in-person payments and upon request by the
registered owner for all other methods of payment, a fee may apply. To registered owners
whose payments are made on their behalf by a mortgage company, the receipted tax billing
will be sent to the registered owner only upon request.
The reissuing of receipts will have a fee as per the Corporate Administration User Fee
Bylaw.
Credit card payments will have a surcharge applied as stated above based on a percentage of
the total amount being paid. The percentage is set for 2024 and may be amended to recover
costs as the Township incurs additional fees from third party vendors without needing to
amend this bylaw.
In accordance with the Section 347 of the Municipal Act, 2001, payments shall be applied
as follows:
1) First to the oldest and all penalty and interest,
2) Then to the taxes starting with the oldest taxes up to the current,
3) Then to other charges added to the roll.
Pre-Authorized Payment Plan
To assist property owners who prefer to equalize their annual tax payments, the following
pre-authorized payment plans are offered:
a) Monthly - provides for a withdrawal from the property owner's bank account to the
Township's bank account on either of two dates being, on the 15th day of each month or
the last business day of each month, an amount sufficient to ensure that all taxes billed
are paid within the current year. Property owners are eligible if their account is paid up
to their chosen date of enrolment. If balances remain on the applicable tax account
penalty and interest does not apply. If a property owner's payment fails to clear the bank
two (2) consecutive times, the Township reserves the right to terminate the plan.
Penalties and interest will apply from that point forward.
The dollar amount to be withdrawn from the participants account shall be recalculated twice
a year:
1) Once in December, calculating a monthly amount based on the previous year's taxes
plus a 3% increase, averaged over eleven payments, to take effect on January 31st of
the year.
2) After the calculation of the final tax bill. In both cases the property owner shall
receive a notification as to the dollar amount change. This calculation would be the
current year's taxes, less what has been paid, divided by the remaining months (or
withdrawals) in the year.
b) Instalment - provides for a withdrawal from the property owner's bank account to the
Township's bank account, on the due date an amount sufficient to ensure that all taxes
due and payable on the said date are paid in full. Property owners are eligible if their
account is paid up to their chosen enrolment date. If a property owner's payment fails to
clear the bank two (2) consecutive times, the applicant relinquishes their right to
participate in the program. Penalties and interest will be applied to all amounts past due.
To participate in any of the Pre-authorized Payment Plans, applicants must submit an
application in writing on the Township's prescribed form and submit it twenty (20) calendar
days prior to the payment withdrawal date.
Participants in the program wishing to make changes to their application (for example -
banking information), or cancel their participation in the program, must do so in writing
within twenty (20) calendar days prior to the payment withdrawal date.
Note that pre-authorized payment plans are an alternative payment plan of the tax bills that
are issued with posted due dates, offered as a courtesy. Failure to keep the arrangement in
good standing will result in the cancellation of this courtesy.
Late Payments and Charges/Penalties and Interest
Payments not clearing the payer's bank will result in the payment being removed from the
applicable tax account and an administration fee, as indicated in the Township's User Fee
By-law, being added to the applicable account.
The payer shall be advised of the returned payment, administrative fee, and the current
balance due and owing on their account.
All Tax Arrears are also subject to Penalties and Interest. In accordance with Section 345 of
the Municipal Act, 2001, and the Township's by-laws, penalty and interest shall be charged
at a rate of 1.25% per month on any tax arrears that remain outstanding on the first calendar
day of each month. The penalty run is generated in the first three (3) business days of the
month, to allow for processing of all payments received.
Penalties and interest charges cannot be waived.
Tax Arrears Collection
Realty taxes are a secured special lien on land in priority to any other claim, except a claim
by the Crown. Taxes may be recovered, with costs, as a debt due to the Township from the
original owner and/or any subsequent owner of the property.
The Township will primarily use the following methods to collect Tax Arrears:
- Verbal communication.
- Email communication (where email address is provided).
- Issue Year End Statements of Taxes, Overdue Notices and Final Notices,
- Send the taxpayer a form or personalized letter(s).
- Arrange terms of payment.
- Issue notice to interested parties.
- Legal action; and
- Tax sale.
Collection Steps
To remind property owners that their tax account is not in good standing, reminder notices
shall be sent to each property owner whose account is over ten dollars ($10.00) in arrears.
Overdue notices shall be forwarded to the property owner by the fifteenth day of the
following months: January, April, and September. Overdue Notices will not be sent to
taxpayers with overdue amounts less than ten dollars ($10.00).
Payment Arrangements
Payment arrangements may be entered into with a property owner who is in tax arrears prior
to the registration of a Tax Arrears Certificate. Payment arrangements must include all tax
arrears, current taxes, accruing estimates of future taxes, penalties, and interest, and be
sufficient to ensure payment in full is realized within a specific period of time. Penalties and
Interest will continue to accrue during all such payment arrangements until full payment on
the account has been made. Pre-authorized payments are the preferred method of payment.
Notwithstanding any such arrangements, no third-party payments will be refused for
payment on account (e.g., payment from a mortgage company), as long as the third party
has sufficient information regarding the property. Confidential account information will not
be released to unauthorized parties.
If acceptable payment arrangements are negotiated, the account is monitored for
compliance. Once a payment arrangement has been established, if there are two (2)
consecutive returned payments or two (2) payments are returned within six months, the
payment arrangement is deemed void, and the taxpayer is advised that payment in full is
required or the next collection step will be taken.
Any payment arrangements made must specify the time schedule, method of payment and
the amount of each payment.
Collection Steps for Account with 2+ Arrears
If acceptable payment arrangements are not agreed upon, then all properties with arrears
which are outstanding over two (2) years shall be subject to the Municipal Tax Sale Process.
The Property Tax account shall be monitored for property owners whose taxes are at or
approaching two (2) years in arrears. The Township will engage a qualified third party to
carry out the procedures and legislated requirements of the Tax Sale Process.
Extension Agreements
An Extension Agreement may be requested by the property owner, their spouse, the
mortgage holder, or their legal agent, after the registration of a Tax Arrears Certificate and
before the one-year period following the registration date.
If no agreement is reached as to the terms, the agreement is denied by the Treasurer, or there
is a breach of the agreement, the tax sale process recommences by returning to the point
where the stop in the tax sale process was at immediately prior to the extension agreement
being requested.
For the purposes of administering the Municipal Tax Sale procedures, Council authorizes
the Treasurer to enter into extension agreements in accordance with the Municipal Act,
2001, and Ontario Regulation 181/03 Municipal Tax Sale Rules, as amended by Ontario
Regulation 571/17.
Public Tender - Sale of Land Process
The Municipal Act provides that the property may be sold by sealed tender, or public
auction. The Township's preference is by sealed tender.
Public tenders will be conducted according to Section 379 of the Municipal Act.
Section 357/358 Tax Reduction Applications
The Treasurer, or designate, will forward to MPAC for processing, application for write-
offs received via Section 357 and 358.
Write-Offs and Rebates
The Township will receive notifications of change in assessment or tax class. Upon receipt
of the notification the Township will process the calculation within two (2) months of
receipt of the notification, depending on whether the final billing for the affected year has
been calculated and mailed. This will facilitate the Township maintaining a balanced
Collector's Roll as it related to the amended Assessment Roll.
Penalty and Interest Reversal
Late payment charges (penalty and interest) are adjusted when the following situations
arise:
a) Taxes are adjusted under Sections 354, 357 or 358 of the Municipal Act.
b) Taxes are adjusted following an Assessment Review Board decision.
c) Taxes are adjusted in accordance with a decision of the Court(s).
d) Deemed by the Treasurer as a gross or manifest clerical error.
e) Per the Municipal Act Section 345 (6) & 345 (7), penalty and interest that has accrued
on a property tax account as the result of nonpayment, and a write-off of taxes has
occurred as the result of one of the legislation tax reduction methods; the penalty and
interest shall be reversed as though the taxes had originally been billed correctly. The
amount of penalties and interest cancelled is limited to the amount related to the tax
reduction associated with a tax adjustment, change in assessment or Township error or
omission.
Treasurer's Write-Offs
In accordance with Section 354 of the Municipal Act, uncollectible taxes may be approved
for write-off by Council on the recommendation of the Treasurer.
Refunds of Credit Balances on Accounts
From time-to-time property tax accounts may experience credit balances for various
reasons, such as:
-
Duplicate payment of a tax instalment(s),
-
Mortgage company and property owner both pay an instalment,
-
A reduction in assessed value,
-
A change in a tax class to lesser tax rate class, and/or
-
Pre-authorized Payments made in advance of an instalment being due.
The property owner must request, in writing, to have any credit balance refunded.
Discretion
To ensure that all taxpayers are treated fairly and equitably, the Treasurer, or designate, has
the authority to exercise discretion in the application of this policy where unusual or
extraordinary circumstances are apparent, provided such discretion is in accordance with all
applicable legislation, ensuring fairness to all taxpayers, and that the overall best interest of
the Township are met.
Reporting
The Treasurer will maintain monthly reporting of all outstanding taxes and proceedings and
will provide Council with annual updates.
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