Warehouses, distribution centres, manufacturing plants and flex buildings all get grouped together as industrial property, but the assessment issues on each can be quite different.
Industrial tax classes and subclasses
Most industrial buildings fall into the industrial tax class, and larger, higher-value industrial properties can fall into the large industrial class instead, which the municipality taxes at its own rate. Land on an industrial site that is not being used, or is only partly built on, may qualify for the vacant land or excess land subclasses. Confirming your property sits in the correct class, and that any excess land has been recognized, is a basic check we do on every industrial file before we look at the value itself.
How MPAC values industrial property
For most industrial buildings, MPAC works from the income approach: the market rent per square foot for that type of space (warehouse rent is not manufacturing rent), an allowance for vacancy, typical operating expenses, and a capitalization rate that reflects the building’s quality, age and location. Every one of those inputs is a place where MPAC’s assumption for your property can be compared against what your building actually earns and costs to run.
Warehouses and distribution centres tend to be judged on clear height, the number and spacing of dock doors, and site coverage. A manufacturing plant is judged more on how well its layout, power supply and column spacing suit the process running inside it. Flex buildings, which mix office and industrial space under one roof, need both sets of assumptions applied to the right portion of the building. When MPAC’s model does not separate these properly, the assessment can drift from what the building can actually earn.
Common issues we see
- Rent and cap rate that fit a different quality of building or a different part of the municipality than yours.
- Site coverage and excess land: if the excess land allowance for a large site is not applied correctly, the assessment can carry value for land that is not usable the way MPAC assumed.
- Functional obsolescence in older plants built around a process that no longer suits modern operations, such as low clear height, tight column spacing or limited truck access.
- A flex building assessed entirely at office or entirely at industrial rent, instead of splitting the two portions the way the building is actually used.
Industrial classes at a glance
| Class or subclass | Typically applies to |
|---|---|
| Industrial | Most warehouses, plants and flex buildings |
| Large industrial | Larger, higher-value industrial properties |
| Vacant land subclass | Industrial land with no building on it |
| Excess land subclass | The unused portion of a larger industrial site |
The deadline to appeal your current assessment to the Assessment Review Board, or to file a Request for Reconsideration with MPAC, is March 31 of the tax year. Business properties can go straight to the Board without filing an RfR first. A change, amended, supplementary or omitted notice carries its own 120 day deadline from the notice date. See our key dates guide for the full schedule.
If your building is leased, MPAC’s Property Income and Expense Return is part of how it builds the rent and expense picture for industrial property generally, and filing it accurately matters. Our income and expense return service covers that filing. When the numbers point to an appeal, our assessment appeals service takes the file to MPAC and, if needed, to the Board. For the detail behind rent, vacancy, expenses and cap rate together, see our guide on how MPAC values income properties. We work with industrial owners across the municipalities on our municipalities pages.