THUNDER BAY — The owner of a large commercial property will pay $130,000 less in annual property tax as a result of a recent decision by the provincial Assessment Review Board.
But the numbered corporation that holds title to the Memorial Avenue site where Walmart, Best Buy and Indigo are located didn't get the much more substantial reduction it had been seeking.
The Municipal Property Assessment Corporation, the City of Thunder Bay, and the owner all used different approaches in estimating the value of the property.
MPAC initially put its value at $55 million.
The city submitted an assessment value of $61 million, while the numbered corporation submitted an estimated value of about $27 million.
After the corporation appealed MPAC's valuation, the review board used a different set of criteria to come up with an assessment of $51 million.
The assessment reduction of $4 million will have an impact on the city's property tax revenue.
Councillor Mark Bentz, who chairs city council's budget deliberations, said "any revenue loss is detrimental to our budget, however we do have assessment growth that is also happening that should more than counteract this. It is not good news for our budgeting, but its impact will be relatively insignificant, I believe."
According to City Treasurer Keri Greaves, the cumulative tax write-off for the 2022 to 2024 tax years will be about $370,000.
"We budget annually for tax appeal write-offs, so this decision will not have a significant impact on the 2024 financial results," he said. "Going forward, the $130,000 annual tax impact of this decision will be redistributed to the rest of the tax base through the regular budget and tax policy processes."
The city collects taxes on properties with a total value of about $13 billion.
Greaves said it's important to note that city tax losses due to assessment appeals have become less significant in recent years.
The average loss over 15 years from 2006 to 2020 was $2.4 million annually, but that has fallen to about $500,000 a year since then.
Despite that promising trend, he said the city continues to monitor appeals and their outcomes, as they "can have a significant impact on tax policy."
