A capping program has been mandated, by the Province, for business taxes since 1998.
The first program was introduced in Bill 79, The Fairness for Taxpayers Act, which required capping tax increases from reassessment to 10% in 1998, and a further 5% in 1999 and 2000. In 2001, the Province continued with the 5% limit on reform related tax increases.
Clawback Percentages
| Taxation Year |
Property Class |
| Multi-residential |
Commercial |
Industrial |
| 2009 |
Not Available until Summer 2009 |
| 2008 |
53.16% |
63.37% |
59.28% |
| 2007 |
57.42% |
69.93% |
19.24% |
| 2006 |
60.07% |
68.97% |
11.25% |
| 2005 |
35.27% |
71.60% |
25.75% |
| 2004 |
28.04% |
80.11% |
37.75% |
| 2003 |
33.09% |
93.75% |
100.00% |
| 2002 |
3.46% |
87.23% |
47.74% |
| 2001 |
3.17% |
93.48% |
21.62% |
| 2000 |
27.27% |
44.83% |
30.26% |
| 1999 |
83.31% |
87.11% |
98.16% |
| 1998 |
83.06% |
87.11% |
98.16% |
Capping/Clawback Mechanism
The Municipal Act, 2001 ("the Act") requires the Region to establish a program to limit any annual tax increases resulting from reassessment to no more than 5% for the Commercial, Industrial and Multi-Residential classes, or an amount determined by other property tax capping options provided to municipalities by the Province in 2005.
The following capping options have been available since 2005. These have been adopted by Council for the 2005 and subsequent taxation years:
-
Assessment-related property tax increases are limited to an amount which is the greater of 10% of the previous year's annualized capped taxes, or 5% of the previous year's annualized full Current Value Assessment (CVA) taxes.
-
Properties, for which tax increases are capped (protected) but are within the $250 of their full CVA taxes, are moved to the CVA tax level within the current taxation year.
-
Properties, for which tax decreases are clawed back but are within $250 of their full CVA, are moved to the CVA tax level within the current taxation year.
-
Eligible new construction/new-to-class properties within the meaning of subsection 331(20) of the Act, are taxed at a minimum of 100% of their full CVA tax value for the 2008 taxation year.
In 2009, the following additional capping options have been made available.
-
Properties that have reached CVA taxes in the prior year may be removed from the current year capping program. These properties once removed from the capping program will remain at CVA level taxes.
-
The following properties may be excluded from the current year capping program:
- properties moving from a capped position in the prior year to a clawback position in the current year
- properties moving from clawback position in the prior year to a capped position in the current year
The Region and its local municipalities were permitted to levy municipal budgetary increases over and above the "cap" limit.
The legislation permits Niagara Region to recover all or part of the cost of the "cap" by one of or any combination of the following:
- Limiting the property tax decreases "clawing back" the decreases within the class;
- Utilizing non-tax revenues; and/or
- A general tax rate increase across all property classes.
Niagara Region has continued to mitigate the costs of capping by withholding (or clawing back) an equivalent amount of available tax decreases within each of the protected class.
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