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POLICY TITLE:
Property Tax Collection Policy
SUBJECT:
Property Tax Billing and Collections
POLICY NO.:
FIN.001
EFFECTIVE DATE:
June 25, 2025
ENACTED BY:
By-Law No. 2142
Table of Contents
1. Policy Purpose .......................................................................................................... 2
2. Policy Statement ...................................................................................................... 2
3. Definitions ............................................................................................................... 2
4. Procedures and Guidelines ....................................................................................... 3
4.1 General ............................................................................................................... 3
4.2 Issuance of Property Tax Bills .............................................................................. 4
4.3 Mailing ............................................................................................................... 5
4.4 Acceptable Payment Methods ............................................................................. 5
4.5 Outstanding Taxes General Notice Procedures ..................................................... 6
4.6 Late Payment Charge Adjustments ..................................................................... 7
4.7 Collection Methods ............................................................................................. 8
5. Policy Review ......................................................................................................... 10
6. Policy Adoption and Review Guidelines.................................................................. 10
7. Repeal - Enactment................................................................................................. 10
Property Tax Collection Policy
Page 2
1. Policy Purpose
The purpose of this policy is to ensure that the Township is able to manage
its accounts receivable effectively and to ensure timely collection to minimize
outstanding amounts owing to the Township. This policy will assist with the
ongoing success of administration, more specifically, it will ensure prompt,
efficient, courteous, and consistent service to all ratepayers of the Township.
2. Policy Statement
This policy takes its authority from Section 286 of the Municipal Act, 2001
which states that the Treasurer is responsible for invoicing, collection and
reconciliation of all accounts receivable in the Township:
"A municipality shall appoint a Treasurer who is responsible for handling all
of the financial affairs of the municipality on behalf of and in the manner
directed by the council of the municipality, including,
a) collecting money payable to the municipality and issuing receipts for
those payments;
b) depositing all money received on behalf of the municipality in a
financial institution designated by the municipality;
c) paying all debts of the municipality and other expenditures authorized
by the municipality;
d) maintaining accurate records and accounts of the financial affairs of
the municipality"
3. Definitions
a) "Cancellation Price" means an amount equal to all the tax arrears
owing at any time in respect of land together with all current real
property taxes owing, interest and penalties thereon and all
reasonable costs incurred by the Township after the Treasurer
becomes entitled to register a tax arrears certificate.
b) "Extension Agreement" is a contract between the Township and the
registered owner of the property 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.
c) "MPAC" - means the Municipal Property Assessment Corporation which
is responsible for determining the assessed value of all classes of
assessment in the Province of Ontario. MPAC administers all phases of
property assessment including appeals of assessment.
Property Tax Collection Policy
Page 3
d) "Municipal Tax Sale" is the sale of land for tax arrears according to
proceedings prescribed by the Act and Ontario Regulation 181/03.
e) "Penalty and Interest" - means the late payment charges applied by
the Township of Hornepayne for non-payment of taxes or any
installment by the due date, in accordance with Section 345 of the
Municipal Act, 2001. The Township shall set the penalty and interest at
the rate of 1.25% per month, or the highest rate allowed under the
Act, on all taxes due and unpaid.
f) "Property Taxes" - means the total amount of taxes for municipal and
school board purposes levied on a property and includes other
amounts as may be added to the tax roll under applicable provincial
legislation.
g) "Tax Arrears" - means any portion of Property Taxes that remain
unpaid after the date on which the taxes are due.
h) "Tax Sale" - means the sale of land for Tax Arrears according to the
proceedings prescribed under the Municipal Act, S.O. 2001, c.25 and
O. Reg.181/03 Municipal Tax Sales Rules, as amended by Ontario
Regulation 571/17.
i) "Treasurer" - means the Treasurer of the Township of Hornepayne
responsible for fulfilling the duties referenced in the Municipal Act or
his/her designate.
4. Procedures and Guidelines
4.1 General
a) The Township of Hornepayne will follow a prescribed policy for the
billing and collection of property taxes. This policy will conform to
current legislation and the Municipal Act, 2001. Where this policy
contradicts legislation of the Province of Ontario or the Government of
Canada, that the legislation shall be followed.
b) The Township of Hornepayne Water and Wastewater billing and
collection process is covered under a separate Water and Wastewater
By-Law and is not impacted by this tax collection policy. However, in
the case when outstanding water and wastewater balances are
transferred to the actual tax roll, this policy will apply to those
amounts that have been added.
c) This policy will provide an open, transparent and consistent framework
for the annual billing and ongoing collection process. Township staff
and Council should reference this document when communicating with
the public regarding property taxes.
Property Tax Collection Policy
Page 4
d) As property tax billing and collection is the primary source of revenue
for the Township of Hornepayne, this policy will help to:
i.
Establish consistent guidelines to be followed with regard to the
billing and collection of property taxes;
ii.
Streamline activities and set out appropriate steps required for
collection of past due property taxes; and
iii.
Ensure a clear and consistent written policy for the Township.
e) This Policy will ensure all activities conform to the current legislation.
Real property tax is levied on the assessment for real property within
the Township of Hornepayne in accordance with Section 307(1) of the
Municipal Act, 2001.
4.2 Issuance of Property Tax Bills
The following guidelines apply to the issuance of property tax bills:
a) The specific due dates will be identified in both the interim and final
levy By-Laws for the Township. The Township will send the tax bills to
every taxpayer at least 21 days before any taxes shown on the tax bill
are due.
b) Interim tax billings may be produced based on 50% of the annualized
taxes of the property for the previous calendar year. The tax billing
may include any special charges levied by the Township or provincial
government. Amounts deemed to be taxes, or items with priority lien
status will be included on the interim bill at one hundred percent
(100%). These items may include, but are not limited to, outstanding
water and wastewater fees.
c) Final tax billing amounts in each instance will be calculated based on
the assessment value on the returned assessment roll and the final tax
rates as approved by Council through the annual budget and the
associated Tax Levy By-Law passed in accordance with Section 312(2)
of the Municipal Act, 2001.
d) All property taxes due in any calendar year may be paid in four
installments without penalty or interest. Where an installment date
identified falls on a statutory holiday, the installment date may be the
following business day.
e) Property tax bills will contain all required information as set out in
Section 343(2) of the Municipal Act, 2001 and any other information
deemed necessary by the Treasurer.
Property Tax Collection Policy
Page 5
4.3 Mailing
a) Issued billings are to meet all requirements of Section 343 of the
Municipal Act. The Municipal Act, 2001 Section 343 (1) requires tax
billings to be post marked and mailed no less than twenty-one (21)
calendar days prior to the due date. The Township will make every
attempt to mail tax bills at least twenty-five (25) calendar days before
the due date when possible. Where allowed by legislation, and where
available, provision of tax bills, arrears notices, and other related
correspondence may be provided electronically.
b) 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 for, unless the taxpayer or the taxpayer's lawyer
directs otherwise. This direction continues until it is revoked in writing.
c) Any tax bill, arrears notice, or other related correspondence sent is
considered delivered to and received by the addressee unless the
correspondence is returned by the Canada Post or an error in the
mailing address is proven by the taxpayer.
4.4 Acceptable Payment Methods
a) Payments are payable to the "Township of Hornepayne", 68 Front
Street, P.O. Box 370, Hornepayne, Ontario P0M 1Z0 and must be
received in the Finance Department at the Township Office on or
before the installment due date to avoid penalty and interest charges.
b) The following payment methods are accepted for property taxes:
i.
In person at the Township Office during regular business hours
by cash, cheque, bank draft, postdated cheque and debit card;
ii.
Cheques may be mailed; however, the cheques must be
received in the Finance Department on or before the
installment due date to avoid penalty and interest;
iii. Payment tendered in US funds (cheque only) will be accepted
based on the exchange rate established by the Township's bank
on the day of the deposit;
iv. Telephone or internet banking. Be aware that currently the
typical processing time for Canadian financial institutions to
transfer a payment to the Township's account can be at least 3
business days. This means that payment made in this manner
should incorporate sufficient lead time in advance of the due
date. If you have multiple properties, payments must
correspond to the appropriate roll number;
Property Tax Collection Policy
Page 6
v.
In person at most Canadian financial institutions. Please review
iv. above for processing time to avoid late payments;
vi. Mortgage company or financial institution on behalf of a
taxpayer; and
vii. By Credit Card using a third-party provider through the
Township website at townshipofhornepayne.ca. Please note
third party providers may charge a fee to use their service. The
fee covers payment handling and processing charges, and it is
the responsibility of the credit card holder to pay.
c) Third party cheques will not be accepted.
d) The Township offers three Pre-Authorized Payment (PAP) plans;
i.
an instalment due date plan (four withdrawals each year)
ii.
a monthly program over ten months (January to October)
iii. a monthly program over twelve months (January to December)
as approved by the Treasurer.
e) A completed Pre-Authorized Payment (PAP) Agreement must be
submitted and approved by the Treasurer or designate to begin the
enrollment process.
f) Payments that are returned by the bank marked "insufficient funds or
non-sufficient funds" will be subject to an NSF fee as set out in
Township's schedule of fees By-Law.
g) An individual who has had two (2) payments returned within a 12-
month period is no longer eligible for PAP. Any payment by cheque
must be certified.
4.5 Outstanding Taxes General Notice Procedures
a) Notices of Past Due Taxes may be sent three times per year but will
not be sent in the months in which a tax billing is issued if there is a
due date or in between installment dates. Past Due Notices may be
sent in the months immediately following the last installment of both
the Interim Tax Bill and Final Tax Bill and at a minimum in the month
of December. The first two notices are mailed only to taxpayers with a
balance of $20.00 or more. The December notices will be mailed to all
taxpayers with any outstanding balance.
b) Affixed to the past due notice following the last installment date of the
Final Tax Bill as well as the notice being sent in December, for those
properties approaching one year in arrears, there may be a notice that
states "Your property is going to be eligible for collection proceedings
and may be forwarded to an external collection agency, which may
Property Tax Collection Policy
Page 7
affect your credit rating. Please contact [Finance Department contact
name and phone number] to avoid having your property account being
sent to an external collection agency."
c) Affixed to the past due notice following the last installment date of the
Final Tax Bill as well as the notice being sent in December, for those
properties approaching two years in arrears, there may be a notice
that states "Your property is going to be eligible for Tax Sale
proceedings. Please contact [Finance Department contact name and
phone number] to avoid having your property registered for Tax Sale."
d) The Treasurer will encourage property owners in tax arrears to
establish a monthly payment plan to repay outstanding taxes in a
timely manner. Payment plans shall be designed to ensure that arrears
are paid in a reasonable amount of time as determined appropriate by
the Treasurer.
e) Effective January 1st, the Treasurer may proceed with the collections
or the tax registration process for those taxpayers who have received
notices as per this policy and who have not contacted the Treasurer or
provided full payment as stipulated on the date of the notice.
4.6 Late Payment Charge Adjustments
a) Late payment charges are adjusted only in the following
circumstances:
i. Taxes are adjusted under Sections 354, 357 or 358 of the
Municipal Act.
ii. Taxes are adjusted following an Assessment Review Board (ARB)
decision.
iii. Taxes are adjusted in accordance with a decision of the courts.
iv. In the event penalty or interest or both was charged as a result
of the Township's error or omission, it shall be at the discretion
of the Treasurer to decide whether the penalty or interest
amount should be adjusted.
b) Penalty and interest will not be adjusted on property tax accounts that
claim they did not receive a tax bill or claim it was sent to the wrong
address. Section 343 of the Municipal Act identifies that tax bills shall
be sent to the ratepayer's residence or place of business or to the
premises where the taxes are payable for, unless the ratepayer(s)
directs the Township otherwise in writing. The direction for the delivery
of tax bills and/or any other applicable notices continues until it is
revoked in writing by the ratepayer Section (343(8)). Therefore, it is
the responsibility of the ratepayer to inform the Township, in writing,
of any changes and/or updates to their property address.
Property Tax Collection Policy
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4.7 Collection Methods
There are five basic remedies used by the Township to enforce payment of
property taxes owing:
a) Penalty and Interest - Late payment charges shall be assessed at the
rate of 1.25%, or the highest rate allowed under the Municipal Act,
and will be added to all past due accounts on the first day of the
month following the due date and monthly thereafter until paid.
Penalty and interest will not be compounded.
b) Rent Attornment - Under the provisions of Section 350 of the
Municipal Act, 2001, rent attornment is available for tenant occupied
properties only. Where taxes are owed in respect of any land occupied
by a tenant, the Treasurer may give the tenant notice in writing
requiring the tenant to pay the rent normally paid to the Landlord to
the Township in order to pay up the amount of outstanding taxes due
on the tenanted property.
c) Bailiff Action - Section 349 of the Municipal Act provides that taxes
may be recovered with costs as a debt due to the Township from the
taxpayer originally assessed for them and from any subsequent owner
of the assessed land or any part of it. Costs associated with this action
are the responsibility of the property owner and are deducted by the
bailiff, in accordance with legislation, prior to the remittance of
payment to the Township.
d) Collection Agency - If a taxpayer does not respond to notices or does
not make a reasonable attempt to enter into a suitable payment
arrangement, the Treasurer may proceed to engage the services of an
external collection agency to attempt the collection of the taxes.
Collection agencies charge a commission on the amounts that they
collect. Section 304 of the Municipal Act, 2001, S.O. 2001, c.25 allows
Township to recover the commission charged for the recovery of debt
including taxes.
e) Tax Registration / Tax sale - Property taxes (including any part
thereof) that are in arrears for two (2) years, or more are eligible for
tax registration under Part XI of the Municipal Act. The Township will
endeavor to work with the ratepayers by encouraging the ratepayer to
either make full payment or a mutually agreed upon payment plan
before sending a property to tax sale.
f) The Township uses a third-party tax collection specialist to administer
the tax sale process on property tax accounts.
g) Once a property is registered and tax sale proceedings have begun,
payment of taxes owing is required in full. Otherwise, an extension
agreement must be signed.
Property Tax Collection Policy
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The ratepayer has one year from the time the tax arrears certificate is
registered to pay the cancellation price to the Township, otherwise the
property is subject to public tax sale.
h) The Municipal Act provides that the property may be sold by sealed
tender, or public auction. The Township`s preference is by sealed
tender. Tenders are opened in an open forum, recorded as received,
and then reviewed to ensure completeness of the tenders submitted.
(Note: Council may make a bid or tender on a property, by resolution,
but they must have a public purpose for the property.) The highest
tender or two highest tenders, if more than one is received, is
retained. The minimum acceptable bid is the cancellation price (In
addition a tender must have a certified deposit that is at least 20% of
the amount tendered). Notice is sent to the highest bidder requesting
payment of the balance of the amount tendered, applicable land
transfer tax, and accumulated taxes to date. All tax sale costs are
added to the individual property tax account balance. Payment must
be received from the highest bidder within 14 days from the date of
the notices of highest bidder being mailed by the Treasurer. Upon
receipt, the Treasurer shall issue a receipt and declare the highest
bidder to be the successful purchaser. If no payment is received within
14 calendar days of the mailing of the notice, the deposit is forfeited. A
notice is then sent to the second highest bidder and the process
repeats.
i) The proceeds of a sale under section 379 of the Municipal Act shall:
i. Firstly, be applied to pay the cancellation price;
ii. Secondly, be paid to all persons, other than the owner, having
an interest in the land according to their priority at law; and
iii. Thirdly, be paid to the person who immediately before the
registration of the tax deed was the owner of the land.
j) Vesting - Where there is no successful purchaser, a notice of vesting
may be issued, and the Treasurer shall register a declaration to that
effect at the local land registry office. Council has two (2) years to
decide whether to vest a property. The Municipal Act allows for
inspection of the property including an environmental assessment.
Council may re-advertise for another tender or auction within two (2)
years without writing off the tax arrears. If Council decides not to vest,
Council may choose to write off the taxes and issue a tax cancellation
certificate. Each year the Treasurer may prepare a list of such
properties for annual write-off thereafter. Council may also decide to
write off all or part of the taxes with the purpose of re-registration of
the tax arrears and repeating the tax sale process from the beginning.
If Council decides to vest the property, the tax arrears will be written
off and the property may be declared surplus and advertised for sale.
Property Tax Collection Policy
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5. Policy Review
This policy shall be reviewed by each term of Council or as determined
necessary by Council or the CAO or the Treasurer.
6. Policy Adoption and Review Guidelines
Date of Adoption
by Council
By-Law No.
Date of Most Recent
Review by Council
Changes Made
Yes/No
June 25, 2025
2142
June 25, 2025
Yes
7. Repeal - Enactment
By-Law No. 1708 is hereby repealed.