This Act adds two assessment rules to the Assessment Act that limit how much the assessed value of eligible residential properties can rise for tax purposes. It creates a formulaic cap (section 15.71) that constrains yearly assessment amounts for owners who receive a Residential Property Tax Relief credit, and a special rule for 2026 (section 15.72) that generally carries 2025 assessments forward into 2026 subject to narrow exemptions.
Those rules are paired with amendments to the Real Property Tax Act to require properties to meet regulation-prescribed requirements, and with regulation amendments that carve out Crown and local government ownership. The law is partly retroactive to January 1, 2025 and contains regulation-making hooks that leave several implementation details to the Director and the Lieutenant‑Governor in Council, so local assessors and municipal finance officers will need to track new guidance closely.
At a Glance
What It Does
The bill limits taxable assessment increases for properties whose owners qualify for the Residential Property Tax Relief credit by replacing unconstrained annual revaluation with the lesser of market value and a calculated value K. It also deems 2026 assessments to equal 2025 assessments for most properties assessed in 2025, with statutorily listed exemptions.
Who It Affects
Directly affected are owners of residential properties who receive the provincial tax relief credit under section 2.1 of the Residential Property Tax Relief Act (excluding certain subcategories), municipal assessment offices and clerks, and provincial assessment administration that must implement the new calculation and exemption rules. Developers and purchasers are affected when transfer and new‑construction rules change assessment timing.
Why It Matters
By divorcing taxable assessments from annual market revaluations for a targeted class, the law alters the growth of municipal tax bases and redistributes near‑term tax pressure. It also delegates substantial detail to regulations and the Director’s discretion, which will determine how broad the exemptions and transfer exceptions become in practice.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
The Act creates a two-part mechanism to slow assessment-driven tax increases for a defined group of residential property owners. For 2025 and most years afterward (but not 2026), section 15.71 requires that the assessed amount for qualifying parcels be no greater than the lesser of market value and a calculated figure called K.
K is built from historical assessed and market values to limit the impact of recent market growth while still including the value of new construction and portions of the property outside the tax‑relief eligibility.
K is calculated by taking a historical base (Lp), subtracting an adjustment (Mp) that reflects the prior gap between market and assessed value, applying a 1.1 multiplier to that difference, and then adding back the current-year values of new construction (P) and the non‑credited portions of the property (N). The formula therefore caps annual assessment growth roughly at 10% above a historical gap while preserving increases tied to new construction or parts of the parcel not covered by relief.
The Act also sets a floor: an assessment cannot be reduced below $100.For 2026 only, section 15.72 freezes most assessments by deeming the 2026 assessment equal to the 2025 assessment unless the Director determines that the property meets specific exempting conditions: new construction or improvements, sale/transfer in 2025 (with regulatory exceptions), or administrative corrections such as errors or classification changes. This creates a single-year carryforward that defers any market-driven revaluation to future years for most qualifying properties.Practical implementation is routed through regulation and administrative discretion.
The Lieutenant‑Governor in Council gains rulemaking authority to define the circumstances under which a transferred property will lose the protective treatment, and the Director receives express authority to exempt properties and to issue assessment notices that reflect the carryforward. Separately, the Real Property Tax Act is amended to require properties to meet regulation-prescribed requirements (and regulations specify that Crown and local government ownership is excluded), which narrows the universe of properties eligible for the statutory treatment and lets regulators impose eligibility conditions.
The Five Things You Need to Know
Section 15.71 caps eligible properties’ assessments at the lesser of market value and 'K', where K = [(Lp – Mp) × 1.1] + P + N, explicitly embedding a 1.1 (10%) growth factor in the calculation.
The Act sets a statutory minimum assessed value of $100 for qualifying properties in any year the provision applies.
For 2026 only, section 15.72 deems a property’s 2026 assessment to equal its 2025 assessment, except for properties with new construction/improvements, properties sold or transferred in 2025 (subject to regulation), or properties for which the Director corrects or alters the 2025 assessment.
If a qualifying property is transferred in the current year, the Act requires it to be assessed in the following year at market value as of January 1 of the current year, unless regulations prescribe otherwise.
Key parts of the Act are retroactive: many Assessment Act amendments are deemed in force January 1, 2025, while some Real Property Tax Act provisions and regulation changes come into force January 1, 2026.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Update structure and references for new assessment provisions
The bill first reworks section numbering and headings to make room for two new assessment sections. This is mechanical but important: it inserts 15.71 (multi‑year cap) and 15.72 (2026 deemed assessment) into the Act and adjusts cross‑references so other provisions point to the new rules. Practically, municipal assessors will see different section citations on assessment forms and in guidance.
Formula cap on annual assessments for certain tax‑relief recipients
Section 15.71 applies from 2025 onward except in 2026 and only to parcels owned by people who qualify for the Residential Property Tax Relief credit (with specific subcategory exclusions). It requires assessors to set that year’s assessed amount at the smaller of market value and the calculated value K. The section defines all variables used in K—Lp, Mp, P and N—tying the cap to historical market and assessed values while allowing increases for new construction and non‑credited portions. The provision also contains a $100 floor and a transfer rule that triggers full market reassessment the year after a transfer, unless regulations say otherwise.
One‑year carryforward freeze for 2026
Section 15.72 creates a temporary rule for properties assessed in 2025: their 2026 assessment is generally the same as 2025’s assessment. The Director can exempt particular properties from that carryforward for defined reasons—new construction or improvements, transfers in 2025 (subject to regulation), or corrections/omissions/errors in prior assessments. The Director must issue 2026 assessment notices reflecting the carried‑forward net taxable value where the section applies.
Aligning existing assessment rules with the new sections
The bill tweaks section 15.8 to reference 15.71 and to change the timing language for 'real and true value' so that several provisions use the prior year’s January 1 date consistently. That harmonization affects calculation dates used across the Act and will change the baseline valuation dates assessors apply when reconciling assessments and notices.
Delegates detail and exceptions to regulation
The Act expands the regulation‑making power to let the Lieutenant‑Governor in Council prescribe the circumstances that trigger the transfer exception in 15.71(6) and the transfer/sale exception in 15.72(3)(b). Those regulatory hooks are the primary place where the government can narrow or widen the statutory protections, so rule‑making will materially affect who benefits and when reassessments occur.
Eligibility requirements and regulation power for real property tax treatment
The Real Property Tax Act changes remove and replace certain paragraphs to require that real property subject to particular treatment must meet requirements prescribed by regulation. They also add an express regulation‑making clause to support those requirements and clarify in regulation that Crown and local government‑owned properties are excluded. This gives administrators a gatekeeping tool to define which parcels qualify for the Assessment Act’s preferential treatment.
Conforming changes and ownership exclusions
Regulations under both Acts are amended to list the new Assessment Act subsections and to specify that properties qualifying under the Real Property Tax Act requirement cannot be owned by the Crown in right of Canada or by a local government. These are the immediate instruments that will operationalize the Act’s exclusions and are where the transfer‑circumstance prescriptions will appear.
Retroactivity and staged entry into force
Several Assessment Act amendments are retroactive to January 1, 2025, meaning assessors must treat 2025 valuation data under the new rules. Separate provisions, including some Real Property Tax Act regulatory duties, come into force January 1, 2026. The staggered commencement creates a transitional year (2025) whose assessments feed directly into the 2026 carryforward rule.
This bill is one of many.
Codify tracks hundreds of bills on this topic across all five countries.
Explore this topic in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Owners entitled to a Residential Property Tax Relief credit under section 2.1 (excluding specified subcategories): they face constrained assessment growth and a 2026 carryforward that limits immediate tax increases tied to market gains.
- Long‑term homeowners in rapidly appreciating neighbourhoods who qualify for the credit: the formula and 2026 freeze slow taxable value increases tied to recent market spikes, reducing short‑term tax pressure.
- Provincial assessment administration: gains rulemaking and exemption authority, allowing centralized control over implementation and the ability to tailor exceptions through regulation rather than primary legislation.
Who Bears the Cost
- Municipal governments and school districts: slowed assessment growth reduces the expanding municipal tax base and may shift revenue pressures to other taxpayers or require higher rates to maintain budgets unless the province offsets the change.
- Non‑credited property owners in the same tax base: if total municipal revenue needs persist, frozen assessments for credited parcels can produce upward pressure on tax rates for other property owners.
- Municipal assessment offices and clerks: must implement the formulaic cap, follow enhanced Director guidance, track transfers against regulatory exceptions, and issue revised notices for 2026, increasing administrative complexity and workload.
Key Issues
The Core Tension
The bill balances immediate taxpayer affordability for a targeted group against fiscal and administrative strain on municipal tax systems: it reduces assessment‑driven tax increases for protected owners but does so by distorting valuation signals and shifting timing and complexity onto assessors, municipal budgets, and potentially other taxpayers—choices that cannot be resolved purely by legal wording and depend on policy trade‑offs in regulation and funding decisions.
The Act targets relief to a specific statutory class by embedding a numerical cap and a one‑year carryforward, but it leaves several high‑impact choices to regulation and the Director. That administrative delegation creates near‑term uncertainty: small differences in how 'transfer' or 'new construction' are defined could change who gets protection and when properties revert to market‑based assessment.
Municipalities will want clarity on whether the province intends to compensate reduced tax base growth or expects them to smooth revenue by raising rates or adjusting services.
Operationally the K formula is precise but data‑heavy: it depends on historical market and assessed values for different parcel portions (credited vs non‑credited) and on accurate tracking of improvements. Assessors will need clear rules on parcel segmentation, treatment of condominium units or multi‑unit parcels, and how to apportion P and N values.
The retroactive application to January 1, 2025 magnifies this workload because assessors must recalculate 2025 values under the new rules to generate any 2026 carryforward, while also handling appeals and Director corrections arising from retroactive adjustments.
There's more to this law than the bill.
Codify Laws traces every connection across the legislative lifecycle.