Why was my homestead property tax credit adjusted due to residing in service fee housing?
Upon review of your homestead property tax credit, it was determined the address from which you filed is service fee housing. Your return was filed using 23% (20% for tax year 2017 and prior) of your total rent to calculate your property tax credit. Regardless of the amount of rent paid, the Income Tax Act provides that a renter living in service fee housing must calculate the property tax credit using only 10% of rent paid.
Service fee housing is an agreement between a municipality and a rental property owner (private or public) to pay a service fee instead of property taxes.
If 10% of your eligible rent does not exceed 3.2% (3.5% for tax year 2017 and prior) of your total household resources, you do not qualify for a homestead property tax credit.
It is the renter's responsibility to determine if the rental property is service fee housing before claiming a credit. Service fees are typically less than property taxes. You can find out if a property is subject to service fee housing by contacting your city/township/county office.