Lawyers Insurance Association of Nova Scotia

Transcription

1 Lawyers Insurance Association of Nova Scotia Change in Use Philip Schofield, Area Manager HRM Valerie Paul, Legal Counsel Chris Kent, Program Manager

2 Agenda Background PVSC Mandate What is Change in Use? Policy Highlights PVSC s process Questions 2

3 Background We have received feedback from municipalities and legal community regarding Change in Use process Change is Use policy and process reviewed Met with LIANS Property Tax Working Group May, 2013 regarding enhancements to Change in Use process Assessment 101 presentation to LIANS membership June, 2013 Enhanced Change in Use process includes: Revised forms and letters (examples in presentation) Updated technology Centralization of program Monitoring and reporting quality Training of assessors 3

4 Property Valuation Services Corp. Municipally funded, independent, not-for-profit organization that provides assessment services for 54 municipalities in Nova Scotia Provides annual assessment rolls to municipalities Municipalities determine tax rate for budget requirements 150 employees in 7 regional offices ~ 600,000 assessment accounts 4

5 PVSC Mandate Legislated mandate Nova Scotia Assessment Act Property Valuation Services Corporation Act Municipal Government Act Section 42 Nova Scotia Assessment Act: All property shall be assessed at its market value, such value being the amount which in the opinion of the assessor would be paid if it were sold on a date prescribed by the Director in the open market by a willing seller to a willing buyer, but in forming his opinion the assessor shall have regard to the assessment of other properties in the municipality so as to ensure that, subject to Section 45A, taxation falls in a uniform manner upon all residential and resource property and in a uniform manner upon all commercial property in the municipality 5

6 What is Change in Use? Change in use is defined as ceasing the exempt use of designated lands as follows: conservation section 76A of the MGA farm section 77 of the MGA forest section 78 of the MGA Non-profit (recreational) section 76 of the MGA A change in use tax is applied when the exempt use of a parcel of land ceases 6

7 What is Change in Use? The change in use tax is issued to the person who ceases the exempt use of the property The change in use tax amount is: conservation 20% of the value of the land s.76 MGA farm 20% of the value of the land s.77 MGA forest 20% of the value of the land s.78 MGA recreational 50% of the value of land s.76 MGA Value of the land is the market value at the time of cessation 7

8 What is Change in Use? What triggers a change in use tax? Change in use tax may be applicable when the exempt use of a parcel of land ceases (conservation, forest or farm) What triggers a review? Cessation of an exempt use due to: Exceptions: Subdivision of property assessed as entirely or partly exempt Sale of property assessed as entirely or partly exempt Notification to PVSC from property owner, agent or third party (e.g. lawyer) PVSC site reviews MGA Section 77 (4) and 78 (4) Exempt property transferred to family member or portion kept for owner upon sale of exempt property a building lot (see definition of family member) If land exempt as forest changes in use to agricultural purposes 8

9 PVSC Process PVSC assessor investigates all sales and subdivisions Contacts owner (letter), former owner and other parties Determines that the property is correctly classified Determines whether a family exemption is applicable Determines whether an exempt use ceased. If so, when and by whom If cessation is confirmed The new value is determined Percentage applied to the new value Person assessed the tax and municipality are notified Municipality provides tax bill as per the MGA Person assessed has 30 day appeal period 9

10 Letter Statement of Property Use Letter sent to current property owner inquiring about exempt status of parcel of land If still used for exempt purpose, owner is to fill out the Statement of Use If transferred to family member, owner is to fill out the Statutory Declaration 10

11 Change in Use Affidavit Property owner may be required to complete an affidavit confirming exempt use of land 11

12 Case Law Reference Green Meadows Estates Ltd. v. Director of Assessment, 1984 CarswellNS 84, 26 MPLR 33, 64 NSR (2d) 36, 143 APR 36, 10 DLR (4th) 454: Where property is used for an exempt purpose up to the date of sale/ conveyance to another party, but ceases to be used for an exempt purpose upon the date of sale/conveyance: the change in use tax shall be calculated based on the value of the property in its new use, post-sale the purchaser may, within a time period prescribed in the change in use notice, provide information sufficient to show that the lands continue to be used for an exempt purpose after sale the lands were not, prior to sale, being used for an exempt purposes (by affidavit, etc) 12

13 Case Law Reference Eastern Forestry Resources Ltd. v. Nova Scotia (Director of Assessment), 1991 CanLII 2473 (NS CA) and Nova Scotia (Director of Assessment) v. McQuillan, 2001 NSUARB 3 (CanLII), aff d 2001 NSCA 91 (CanLII): Where the property is used for an exempt purpose up to the date of sale/ conveyance and for a time post-sale/conveyance, the property continues to be exempt until it is no longer used for an exempt purpose: no change in use tax is to be assessed until the exempt use ceases, regardless of the new owner or the intended future use the change in use tax should be assessed against the owner, and based on the value of the property after it ceases to be used for an exempt purpose the change in use tax is assessed to the owner at the time the exempt use ceases 13

14 Questions? Further questions Chris Kent Program Manager

15 Related Legislation Section 2 Nova Scotia Assessment Act: (g) farm property means the land and complementary buildings used for agricultural purposes but does not include any residential property and the land used in connection therewith; (h) forest property means any lot of land, excluding any buildings or structures thereon, not used or intended to be used for residential or commercial or industrial purposes or any combination of such purposes. (s) resource property means (i) farm property, (ia) aquaculture property, (ib) conservation property, (ii) forest property owned by a person who owns less than fifty thousand acres of forest property in the Province, 15

16 Related Legislation Section 29 Nova Scotia Assessment Act: (1) All land in excess of three acres of any non-profit community, charitable, fraternal, educational, recreational, religious, cultural or sporting organization or institution, excluding any buildings or structures thereon, that is subject to taxation and that is used directly and solely for the purposes of the non-profit community, charitable, fraternal, educational, recreational, religious, cultural or sporting organization or institution shall be exempt from taxation under this Act or any other general or special Act of the Legislature authorizing a tax on the assessed value of property except as provided in the Municipal Government Act, unless the proper officers of the organization or the institution prior to the first day of December, 1977, inform the Director in writing that they do not wish this Section to apply to their property. (2) Where this Section applies to a property, or part thereof, the property shall be assessed as commercial property partly exempt from taxation pursuant to Section 40, but shall be separately identified and the number of acres to which this Section applies shall be set out on the roll. (3) to (10) repealed 16

17 Related Legislation (12) An assessment under subsection (7), a determination that land has ceased to be used for a purpose sent out in subsection (1) and a determination of acreage under subsection (2) may be appealed in accordance with Sections 62 and

18 Related Legislation Section 45B Nova Scotia Assessment Act: (1) Subject to subsections (2), (3), and (5), conservation property shall be exempt from taxation under this Act or any other public or private Act of the Legislature authorizing a tax on the assessed value of property. (4) Conservation property to which this Section applies shall be assessed as resource property and for the purpose of Section 41 shall be valued and entered on the roll as such, but the number of acres to which this Section applies shall be set out on the roll. 18

19 Related Legislation Section 46 Nova Scotia Assessment Act: (1) All land, excluding any buildings or structures thereon, classified as farm property shall be exempt from taxation under this Act or any other public or private Act of the Legislature authorizing a tax on the assessed value of property. (2) Farm property shall be assessed as resource property partly exempt from taxation pursuant to Section 40, but shall be separately identified and the number of acres to which this Section applies shall be set out on the roll. (11) An assessment under subsection (6), a determination that land has ceased to be used for agricultural purposes and a determination of acreage under subsection (2) may be appealed in accordance with Sections 62 and

20 Related Legislation Section 47 Nova Scotia Assessment Act: (1) All forest property bona fide used or intended to be used for forestry purposes shall be exempt from taxation under this Act or any other public or private Act of the Legislature authorizing a tax on the assessed value of property, except as provided in the Municipal Government Act. (2) Forest property to which this Section applies shall be assessed as property exempt from taxation pursuant to Section 41, but shall be separately identified and the number of acres to which this Section applies shall be set out on the roll. (11) An assessment under subsection (6), a determination that land has ceased to be bona fide used or intended to be used for forestry purposes and a determination of acreage under subsection (2) may be appealed in accordance with Sections 62 and

21 Related Legislation Sections 76 and 76(A) Municipal Government Act: 76 (1) An owner of land to which Section 29 of the Assessment Act applies shall annually pay to the municipality in which the land is situate a tax, to be known as a recreational property tax, equal to five dollars per acre, or part of an acre, for all of the land assessed as recreational property. (4) In the event that any land, or any part thereof, to which this Section applies ceases to be land used directly and solely for the purposes of a non-profit community, charitable, fraternal, educational, recreational, religious, cultural or sporting organization or institution a change in use tax equal to fifty per cent of the value, determined by the assessor pursuant to the Assessment Act, of the land or part thereof to which this Section ceased to apply, is due and payable to the municipality in which the land is situate by the person determined by the assessor to be responsible for the change in use, unless the land becomes farm property, in which case no change in use tax is payable. 21

22 Related Legislation 76(A) (1) The Minister of Environment shall in each year pay to the municipality in which conservation property exempt from taxation is situate a grant equal to the amount that would have been due and payable to the municipality had each conservation property in the municipality continued to be classified as it was immediately before becoming conservation property. (2) Notwithstanding anything in this Act or any other Act of the Legislature authorizing a tax on the assessed value of property, no change in use tax is payable by reason of a property becoming conservation property. (3) Where any land, or part thereof, to which this Section applies, ceases to be conservation property, a change in use tax, determined by the assessor pursuant to the Assessment Act, equal to twenty per cent of the value of the land, or part thereof, that ceased to be conservation property is due and payable to the municipality in which the land is situate by the person determined by the assessor to have been responsible for the change in use. 22

23 Related Legislation Section 77 Municipal Government Act: (1) The Minister shall in each year pay to the municipality in which farm property exempt from taxation is situate a grant equal to $2.10 per acre in respect of the land. (3) Where any land, or part thereof, to which this Section applies ceases to be farm property, a change in use tax, determined by the assessor pursuant to the Assessment Act, equal to twenty per cent of the value of the land, or part thereof, that ceased to be farm property is due and payable to the municipality in which the land is situate by the person determined by the assessor to have been responsible for the change in use, unless the land, or part thereof, becomes forest property bona fide used or intended to be used for forestry purposes, in which case no change in use tax is payable. 23

24 Related Legislation (4) Subject to subsections (5), (6) and (7), an owner of farm property may (a) transfer to each of the owner s father, mother, brother, sister, son, daughter, grandson, granddaughter or spouse; or (b) convey, reserve to or set aside for the owner, one lot suitable for the erection of a single family dwelling and the (c) lot shall not exceed one acre or the minimum size required by any applicable law, whichever is larger; and purposes. (d) change in use tax is not payable if the land ceases to be used for agricultural 24

25 Related Legislation (5) For the purpose of subsections (6) and (7), transfer includes conveyance, reservation to and setting aside for. (6) The change in use tax is payable by the transferor of land referred to in subsection (4) in accordance with this Section if, within seven years of the date of the transfer, the owner of the lot, grantee of the lot or person for whom the lot is reserved or set aside transfers the lot to any person other than a father, mother, brother, sister, son, daughter, grandson, granddaughter or spouse of the owner or to the owner, then the change in use tax is payable by the transferor in accordance with this Section. (7) Subsections (4) to (6) do not apply to a transfer of land unless the grantor or person reserving or setting aside the land files, in the registry, a statutory declaration that the grantee of the land or person for whom the land is reserved or set aside, as the case may be, is a person named in subsection (4). 25

26 Related Legislation Section 78 Municipal Government Act: (1) In lieu of all rates and taxes of the municipality, an owner of forest property bona fide used or intended to be used for forestry purposes shall annually pay a tax, to be known as a forest property tax, equal to and (a) twenty-five cents per acre, if the forest property is classified as resource property; (b) forty cents per acre, if the forest property is classified as commercial property and, where an area, village or commission rate is levied for fire protection, the owner is liable to pay an additional annual tax not exceeding one cent per acre, as the authority levying the area, village or commission rate determines. 26

27 Related Legislation (2) Where any land, or part thereof, to which this Section applies, ceases to be land used for forestry purposes, a change in use tax, determined by the assessor pursuant to the Assessment Act, equal to twenty per cent of the value of the land, or part thereof, that ceased to be used for forestry purposes is due and payable to the municipality in which the land is situate by the person determined by the assessor to have been responsible for the change in use, unless the land, or part thereof, is used for agricultural purposes, in which case no change in use tax is payable. (3) Subject to subsections (4), (5) and (6), an owner of forest land may transfer to each father, mother, brother, sister, son, daughter, grandson, granddaughter or spouse or may convey or reserve to or set aside for the owner one lot suitable for the erection of a single family dwelling, and the change in use tax is not payable if the land ceases to be used for forestry purposes. (4) A lot referred to in subsection (3) shall not exceed one acre or the minimum size required by any applicable law, whichever is larger. 27

28 Related Legislation (5) If, within seven years of the date of the transfer, conveyance or reservation to or setting aside for the owner of a lot referred to in subsection (3), the grantee of the lot or person for whom the lot is reserved or set aside transfers the lot to any person other than a father, mother, brother, sister, son, daughter, grandson, granddaughter or spouse of the owner referred to in subsection (3) or to the owner, then the change in use tax is payable by the transferor in accordance with this Section. (6) Subsections (3) to (5) do not apply to any transfer, conveyance, reservation or setting aside of lands unless the grantor or person reserving or setting aside the land files, in the registry, a statutory declaration that the grantee of the land or person for whom the land is reserved or set aside, as the case may be, is a person named in subsection (3). 28