Tax Instalment Payment Plan (TIPP) recalculation
Whether you’re looking to join the Tax Instalment Payment Plan (TIPP) or already on it, you may be wondering how your instalments are calculated and why the instalment amount can change.
If you’re an existing TIPP member or one enrolling for Jan. 1. Your monthly instalments are spread over the entire year (12 months) and your account is paid in full after your Dec. 1 instalment.
Your monthly instalment may change during the year to ensure you pay no more or less than your annual property tax bill. It’s important to remember TIPP instalment changes are only made to spread the impact of your annual property tax bill changes over the year. Non-TIPP participants pay their full property tax bill at the end of June, including any change in their yearly amount.
Frequently asked questions
The City reviews your January to June instalment amount in November after budget approval and the revised payment amount becomes your instalment beginning January 1. Including November budget decisions in your January to June TIPP instalment amount creates greater stability in your monthly payments by spreading them more evenly over the year.
Property owners whose monthly instalment are changing will receive a letter informing them of the change to their instalment amount in advance of the adjusted withdrawal.
Your January 1 to June 1 monthly instalments are calculated by taking your total amount of property tax paid in the previous year and adding November budget decisions and dividing the result by 12, taking into consideration any applicable adjustments affecting your tax account, rounded up to the nearest dollar.
The change percentage between your December and January instalment amount is not equal to your year-to-year tax bill change percentage. It’s simply the change required to spread your monthly payment amounts more evenly over the year.
In January, we’ll finalize and send out your property assessment notice. In the spring, the province will release their budget, indicating the amount of provincial property tax The City is required to collect on their behalf. These are the final pieces of information we need to calculate your property tax bill and calculate your July to December TIPP payment.
Your July to December instalments are calculated by taking your current year’s tax bill minus payments made to date divided by six. The revised instalment amount will start on July 1 and is shown on your annual tax bill.
The change percentage between your June and July instalment amount is not equal to your year-to-year property tax bill change percentage. It’s simply the change required to ensure you pay no more or less than your annual tax bill.
Your annual property tax bill will be mailed to you at the end of May. As a TIPP participant, your property tax bill is not a request for payment. However, it will show:
- the credit resulting from the instalments made January 1 to May 1
- the June 1 instalment amount
- the new instalment amount beginning July 1
You may join TIPP at any time during the year. There is no charge to join or initial payment required.
If you join after January 1, in the year your instalments begin, they’ll be spread over the remaining months of the year and not 12. As you continue your TIPP participation into the next year, your instalments will then be spread over the entire year (12 months) and be adjusted as described above.
For example: If you join TIPP with your first payment coming out March 1, your instalments will be spread over the last 10 months of the year. Your March to June instalments on your first year participating in TIPP will be calculated by taking your total property tax paid in the previous year plus The City’s current year budget change divided by 10. As you continue your TIPP participation into the next year, you’ll be an existing TIPP member for January 1 and your payments for that year will be spread over the full 12 months.
To forecast your 2024 January-to-June monthly tax instalments, we used your 2023 total annual tax bill amount (which includes both The City and provincial portions) and added the approved 2024 budget decision increase of 7.8 per cent for residential homes. Then, we divided that amount by 12 to determine participant’s 2024 January to June monthly TIPP instalment amount.
When the 2024 property tax bill is mailed in May, July to December instalments are reviewed again to ensure participants pay no more or less than your annual tax bill. TIPP participant’s property tax bill amount is paid in full after the Dec. 1 instalment in 2024. Non-TIPP participants pay their full property tax bill at the end of June 2024.
Your TIPP instalments are reviewed twice a year, first in January and then in July to evenly spread out your payment amounts and ensure you pay no more or less than your 2024 annual property tax bill which includes both The City and provincial portions.
Yes, they do. We have included the approved 2024 budget decision increase of 7.8 per cent for residents and 3.5 per cent for businesses in the recalculations for January to June payments.
My January to June TIPP payments are different than what I have heard the budgeted tax increase was. Why?
When calculating TIPP instalments, it’s not as simple as adding 7.8 per cent to your 2023 December amount. That’s because the change percentage between your December and January instalment amount is not equal to your year-to-year tax bill change percentage.
We recalculate your TIPP payments to spread your monthly payment amounts more evenly over the year. And, to make sure that by the time you make your last instalment you have paid your 2024 taxes without incurring penalties or fees. Your property tax bill amount is paid in full after the Dec. 1 instalment each year. You pay no more or less than your annual property tax bill each year.