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Municipality of Powassan
Tax Collection
Policy
Adopted by Council
November 16, 2021
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Municipality of Powassan
Tax Collection Policy
1. Policy Statement
This policy was developed to provide guidance to staff and taxpayers on procedures
pertaining to the billing and collection of property taxes. It is designed to be
implemented in accordance with the governing legislation.
2. Definitions
For the purposes of this policy:
(a) "Cancellation Price" shall mean an amount equal to all tax arrears, current taxes,
interest and penalties thereon, and all reasonable costs incurred by the Municipality
after the registration of a tax arrears certificate.
(b) "Council" shall mean the elected Mayor and Council of the Corporation of the
Municipality of Powassan.
(c) "Extension Agreement" shall mean a contract between the Municipality and the
property owner(s) to established a fixed repayment schedule by which the
Cancellation Price will be paid, which shall be entered into after the registration of
a Tax Arrears Certificate and prior to one (1) year following the registration date.
(d) "MPAC" shall mean the Municipal Property Assessment Corporation.
(e) "Municipality" shall mean the Corporation of the Municipality of Powassan.
(f) "Tax Arrears" shall mean any portion of property taxes that remain unpaid after
the date on which they are due.
(g) "Tax Arrears Certificate" shall mean a document which is registered on title,
indicating that the described property will be forced into a municipal tax sale if all
property taxes are not paid to the Municipality within the period stipulated.
(h) "Treasurer" is the person appointed by the Municipality who is responsible for
handling all of the financial affairs of the Municipality on behalf of, and in the
manner directed by, Council.
3. Purpose
The purpose of this policy is to establish efficient and effective procedures and processes
for property tax billing and collection for the Municipality, and to ensure municipal tax
revenues are collected in a timely and effective manner.
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4. Scope
This policy covers all aspects related to the billing and collection of property taxes and
any amounts added to the roll for collection, up to and including the initiation of tax sale
proceedings.
5. Legislative Authority
This policy is written in compliance with the Municipal Act, S.O. 2001 (The Act), Parts
VIII, IX, X, and XI in particular, related Ontario Regulations made under The Act, the
Planning Act, the Assessment Act, and any applicable Municipal by-laws, as amended.
Should there be any incongruences between the policy and the governing legislation, the
provisions of the governing legislation will prevail.
6. Objectives
The objectives of this policy are as follows:
(a) Establish procedures for the billing of property taxes;
(b) Ensure the timely collection of property taxes;
(c) Establish processes to collect property taxes; and
(d) Establish processes to collect property tax arrears.
7. Governing Principles
7.1
The procedure of collecting property taxes should be applied universally,
uniformly, and consistently.
7.2
The Treasurer or designate may exercise discretion in furthering the objectives of
this policy.
7.3
The Treasurer or designate may take all means necessary provided within the
Municipal Act, 2001, as amended, to balance taxpayer's interests with those of the
Municipality. In doing so, the Treasurer or designate will strive to keep to a
minimum the administrative and legal cost.
7.4
At all times, the Municipality should take reasonable care to respect and protect
the interests of the taxpayer as well as those of the Municipality, including rights
to privacy and confidentiality.
8. Accountability
8.1
The Treasurer is responsible for ensuring that property tax collection processes
are performed in accordance with this policy and all applicable legislation.
8.2
The Treasurer or designate is responsible for:
8.2.1 Ensuring this policy remains consistent with current legislation;
8.2.2 Ensuring applicable staff are aware of, and trained on, this policy;
8.2.3 Communicating any policy revisions to applicable staff; and
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8.2.4 Assessing overdue property tax accounts to ensure tax collection processes are
performed in accordance with this policy.
9. Billing Procedures
9.1
Billing will be in two (2) stages - Interim and Final Billing. A by-law passed in
advance by the Municipality is a requirement to bring into effect both the Interim
and Final Tax Billings.
9.2
The Tax Bill will contain the required information as set out in Section 343(2) of
the Municipal Act, 2001, as amended, as well as any other information that is
deemed necessary by the Treasurer or designate.
9.3
The Tax Billing may contain local improvement charges, area charges, business
improvement area charges, and any special charges levied by the Municipality or
provincial government.
9.4
Interim Tax Billing:
9.4.1 Interim Tax Bills are based on the returned assessment roll from MPAC. As
authorized under Section 317 of The Act, the Municipality will bill a property
under this category based on no more than 50% of the previous year's
annualized taxes billed.
9.4.2 Interim Tax Bills are produced in February of every year.
9.4.3 The Treasurer or designate shall send a tax bill to every taxpayer at least
twenty-one (21) days before any taxes shown on the tax bill are due.
9.5
Final Tax Billing:
9.5.1 Final Tax Bills are based on the tax rates established according to the
Municipal budget by-law and the Ontario Ministry of Finance, which sets the
education tax rate.
9.5.2 Final Tax Bills are produced in June of each year.
9.5.3 The Treasurer or designate shall send a tax bill to every taxpayer at least
twenty-one (21) days before any taxes shown on the tax bill are due.
9.5.4 Final Tax Bills are based on the sum of the current value assessment of the
property multiplied by the appropriate tax rates, plus all local improvement
charges, business improvement charges, and any special charges levied by
provincial legislation.
9.5.5 The Final Tax Bill payable will be the sum of the Interim Tax Bill deducted
from the final tax amount.
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9.6
Supplementary Tax Billing:
9.6.1 MPAC usually provides additional assessment information on properties that
necessitates a supplemental bill. The Municipality will bill for these
supplementary assessments as soon as it received the data from MPAC, or at
the time of final billing for the current year.
9.6.2 Supplementary taxes are due on the date identified on the Supplementary Tax
Bill.
9.6.3 The Assessment Act provides two grounds when supplementary tax billing can
be applied:
9.6.3.1
Omissions
(a) The Assessment Act, Section 33, provides grounds for the
taxation of real property liable for taxation if that property was
omitted in the tax roll of that current year at the time of
assessment.
(b) The taxable period allowed is the current year and the preceding
two (2) years.
(c) The supplementary tax billing should be treated as part of the
full tax for the current year.
(d) The Supplementary Tax Bill will be post-marked and mailed not
later than twenty-one (21) days from the date of the first
installment due date.
9.6.3.2
Additions
(a) The Assessment Act, Section 34, provides grounds for taxation
of assessment of real property that has increased in value or has
been added after the return of the last revised roll. The real
property could have increased in value through the erection,
alteration, enlargement, or improvement of any building,
structure, machinery, equipment, or fixture or any portion
thereof that commences to be used for any purpose.
(b) The supplementary tax billing should be treated as part of the
full tax for the current year.
(c) The Supplementary Tax Bill will be post-marked and mailed not
later than twenty-one (21) days from the date of the first
installment due date.
(d) The taxes apply to the current year only.
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9.7
Apportionment Tax Billing
9.7.1 Section 356 of The Municipal Act, 2001, as amended, provides grounds for
apportioning property taxes to present owners for lands previously assessed as
one block but subsequently severed or otherwise subdivided into two or more
distinct parcels.
9.7.2 The apportionment should reflect the revised configurations and the levied
and unpaid property taxes.
9.7.3 The apportionment should be treated as part of the full tax for the current year,
and the payment period should not exceed time allowable as per The Act.
9.8
Due Dates
Notwithstanding fluctuations as a result of budget approval or other unforeseeable
delays, due dates for the payment of property taxes are as follows:
9.8.1 Interim Tax Bill:
(a) interim taxes are billed in a single installment, due and payable by the
last business day in March of each year.
9.8.2 Final Tax Bill:
(a) The first installment of the final billing is due and payable by the last
business day in July of each year.
(b) The second installment of the final billing is due and payable by the last
business day in September of each year.
9.8.3 Supplementary Tax Bill:
(a) Supplementary taxes shall be billed in two installments. The first
installment shall be due no less than twenty-one (21) days from the
billing date, and the second installment shall be due no less than
twenty-eight (28) days thereafter.
(b) Notwithstanding the above, when supplementary taxes are billed with
the Final Tax Billing, the installment due dates shall be as per Section
9.8.2 of this policy.
10. Mailing of Bills
10.1
Any notices of property taxes or letters sent by ordinary mail are considered
delivered to, and received by, the addressee unless the notice or letter is returned
by the Post Office or an error in the mailing address is proven. Failure to notify
the Municipality of an address change is not deemed an error.
10.2
Section 343 of the Municipal Act, 2001, as amended, provides that tax bills shall
be sent to the taxpayer's residence or place of business or the premises where the
taxes are payable for, unless the taxpayer directs the municipality otherwise.
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Further, Section 343(8) of the Municipal Act, 2001, as amended, directs a
municipality to continue to deliver tax bills to the address in its records until it is
revoked in writing by the taxpayer.
10.3
Where allowed by legislation, and where available, the provision of tax bills,
arrears notices, and other related correspondence may be provided electronically.
11. Payment of Bills
11.1
Tax billings are payable to the Corporation of the Municipality of Powassan, 250
Clark Street, PO Box 250, Powassan ON P0H 1Z0. The following payment
methods are accepted for property taxes:
(a) Debit and cash payments may be received in person at the reception desk of
the Municipal Office.
(b) Telephone or internet banking through most Canadian financial institutions.
(c) Cheques may be delivered in person, dropped in the after-hours dropbox at
the front door of the Municipal Office, or mailed. The date the payment is
received must be no later than the installment due date in order to avoid
penalties and interest.
(d) Payments may be made at most Canadian financial institutions. The date of
the teller's stamp is considered to be the date of payment.
(e) Payments may be made by a mortgage company or other financial
institution on behalf of a taxpayer.
(f) Through any preauthorized tax payment plans (PTAP) as offered by the
Municipality, and subject to the terms and conditions attached thereto.
Properties which have held an arrears balance in either the current or
previous calendar year shall not be permitted to join the PTAP program.
11.2
"Third Party" cheques will not be accepted. A cheque payable to the property
owner is considered to be a third-party cheque and is not an acceptable form of
payment.
11.3
In accordance with Section 347 of The Act, payments shall be applied as follows:
(a) First, to penalties and interest charges owing;
(b) Then, to taxes in reverse chronological order; and
(c) Finally, to any other charges added to the roll.
11.4
Change will not be returned for non-cash payments accepted in excess of the
amount due on the tax account. Should a credit appear on the tax account as a
result of a payment, it will be applied to subsequent installments not yet due in the
current or future years. However, upon the written request of the property owner,
a refund may be processed provided that a minimum of fifteen (15) business days
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have passed since the payment was received and the amount being requested for
return is no less than $50.00.
11.5
If a taxpayer submits two (2) NSF cheques for tax payment within one (1)
calendar year, personal cheques will no longer be accepted unless they are
certified. A fee will be charged on all NSF cheques as per the current fees by-law.
11.6
Should a payment be tendered in U.S. funds, it will be accepted at the exchange
rate established by the financial institution holding the accounts of the
Municipality on the day it is posted.
12. Collection Procedures
12.1
General
12.1.1 Property taxes which remain unpaid after the Interim and Final Billing due
dates are considered in arrears. Past due notices shall be sent bi-annually to all
taxpayers with an arrears balance greater than $10.00. The first notice shall be
mailed in May, and the second notice shall be mailed in October.
12.1.2 In addition to notices, personal contact may be made by the Treasurer or
designate where deemed necessary and appropriate by way of telephone,
personal interviews, or email.
12.2
Late Payment Charges
12.2.1 Penalty at a rate of 1.25% on the amount of property taxes due and unpaid
may be imposed as a penalty for the non-payment of property taxes on the
first day of default.
12.2.2 Interest charges at a rate of 1.25% will be applied on the first day of each
month on the amount of property taxes due and unpaid. Interest will accrue
only after the first day of default of the installment due date.
12.2.3 Where the rate of 1.25% per month is the maximum allowable under the
Municipal Act, 2001, as amended, Council may adjust or alter the rate for
penalty and interest by adopting an alternate rate by by-law.
12.2.4 Properties which are enrolled in the PTAP, where the total of the current and
outstanding taxes, penalties, and interest will be paid by December 31 of the
year enrolled, will be exempt from further late payment charges.
12.2.5 Late payment charges will not be waived or reduced under any circumstances,
unless they have arisen as a result of an error on the part of the Municipality
or where otherwise deemed appropriate in the sole discretion of the Treasurer.
12.3
Properties in Distress
12.3.1 If any part of tax arrears are due with respect to any land on the first (1st) day
of January in the second (2nd) year following that in which the property taxes
become owing, that property shall be considered in distress.
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12.3.2 For tax accounts which will be considered in distress as of January of the
following calendar year, a collection letter is to be sent in November of the
current year to the property owner(s) advising of the current delinquency and
tax arrears situation and asking for payment in full or satisfactory payment
arrangements to be made by a given date. Letters and correspondence should
encourage payment.
12.3.3 If acceptable arrangements are made, the account is monitored for compliance
and follow-up made be made in writing or by telephone as required.
12.3.4 If no reply is received, a second letter is to be sent in December stating that
failure to reply will result in further actions being taken to collect the
outstanding taxes, which will result in additional costs to the property owner.
12.3.5 If no response is received with respect to the second letter, and/or the property
owner and Municipality are not able to negotiate a mutually beneficial
repayment arrangement, a final notice will be sent in January providing a date
by which a Tax Arrears Certificate will be registered on title should
satisfactory arrangements not be made.
12.3.6 If no response is received, or payment arrangements satisfactory to the
Municipality in its sole discretion are not made, the Treasurer or designate
will commence an action as set out in Section 13 of this policy to enforce
collection.
13. Collection Procedures on Tax Arrears
As outlined under Section 349 of the Municipal Act, 2001, as amended, taxes are a
special lien on the land in priority to every claim, privilege, lien or encumbrances of
every person except the Crown, and the lien and its priority are not listed or impaired by
any neglect, omission or error of the Municipality or its agents or through taking no
action to register a Certificate of Tax Arrears. Section 349 of The Act provides that taxes
may be recovered with costs as a debt due to the municipality from the taxpayer
originally assessed from them and from any subsequent owner of the assessed land or any
part of it.
There are four methods set out by legislation that the Municipality may use to collect any
unpaid taxes:
(a) Bailiff Action: Section 349 of The Act provides that taxes may be recovered with
costs as a debt due to the municipality from the taxpayer originally assessed for
them, and from any subsequent owner of the assessed land or any part of it.
(b) Collection Agency: Section 304 of The Act provides that, if a municipality uses a
registered collection agency in good standing under the Collection Agencies Act
to recover a debt, including taxes, payable to the Municipality, the collection
agency may recover its costs as long as those costs do not exceed the amount
approved by the Municipality.
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(c) Rent Attornment: Under Section 350 of The Act, where taxes are owed in respect
of any land occupied by a tenant, the Municipality may seize the rents of an
income producing rental property upon giving proper notice.
(d) Tax Registration/Tax Sale: Section 373 of The Act provides that, where any part
of tax arrears is owing with respect to land in a municipality on January 1st in the
second (2nd) year following that in which the real property taxes become owing,
the Treasurer of the municipality or designate may prepare and register a tax
arrears certificate against the title to that land.
14. Tax Registration/Tax Sale Process
14.1
Properties that are in arrears on January 1 of the second (2nd) year in which the
property taxes are due are eligible for tax registration under Section 373 of The
Act. The Treasurer or designate will work with the property owner to negotiate an
adequate payment arrangement of all outstanding taxes, penalties, and interest.
14.2
If the property owner is unresponsive to any communications from the
Municipality, adequate payment arrangements have not been made, and/or where
it is deemed by the Treasurer or designate to be in the best interests of the
Municipality, a tax arrears certificate shall be registered against the property.
14.3
The property owner(s) or other interested party has one (1) year from the date of
registration in which to redeem the property for all taxes, interest, and penalties
outstanding, as well as any associated costs incurred by the Municipality.
14.4
If a Tax Arrears Certificate has been registered against the property, no partial
payments can be accepted by the Municipality unless the property owner(s) have
entered into an Extension Agreement with the Municipality. As outlined under
Section 378 of The Act, the Treasurer or designate may, at their discretion, enter
into such an Extension Agreement with or without Council review and
consideration.
14.5
The Treasurer or designate may make every effort to assist the property owner(s)
to remit the cancellation price within one (1) year of certificate registration.
Payment of the cancellation price will include any and all fees incurred by the
Municipality in during the collection process, as well as any administrative
charges imposed by the Municipality's fees by-law.
14.6
The Municipality will use a third-party to carry out the tax sale process as
outlined in the Municipal Tax Sale rules.
14.7
The Treasurer or designate may proceed with registration following the
procedures as outlined in The Act, up to a realization of the tax arrears or
possession and sale of the property.
14.8
All costs associated with the Tax Sale will be added to the tax roll and interest
charged thereon, to be fully recovered by the Tax Sale.
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15. Vesting
15.1
Where there is no successful purchaser in a Tax Sale, a Notice of Vesting may be
issued and the Treasurer or other agent 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.
15.2
Council may elect to re-advertise for another tender or auction within two (2)
years without writing off the tax arrears. If Council elects not to vest, Council
may choose to write off the taxes and issue a tax cancellation certificate. 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.
15.3
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.
16. Write-offs
16.1
From time to time, adjustments may be made to a tax roll which reduce the total
amount of property taxes owing. The following are potential sources of credit-
generating adjustments:
(a) Request for Reconsideration: a property owner may be eligible to have
their property reassessed if they feel that there are discrepancies in the
original assessment.
(b) Section 357/358/359 Application: A property owner may be eligible to
have their property assessment adjusted by MPAC if any one or more
reasons apply under Section 357/358/359 of The Act. The current owner
may revert back up to three (3) years, if applicable.
(c) Vacancy Rebates: A property owner may be eligible for a vacancy rebate
on their commercial or industrial taxes if the building has not been used for
any purposes for a minimum of ninety (90) days.
16.2
Upon receipt of MPAC-approved assessment adjustments, the Treasurer or
designate will have the authority to apply said adjustments to the property tax roll
and apply any credits to the tax account.
16.3
A property owner seeking a vacancy rebate must submit a completed and signed
Commercial/Industrial Vacancy Rebate application to the Municipal office by
February 28th of the year following the vacancy.
16.4
By default, any credits posted to a tax account will be used to offset future tax
levies. However, the owner may request, in writing, a refund of the credit balance
on their tax account. Any refunds issued will be in the name of all registered
owners on the account.