Hotels, long-term care properties, gas stations and golf courses rarely sell or rent on the open market the way an office building or a plaza does, so MPAC values them differently.
What counts as special purpose
Special purpose properties include hotels, long-term care and similar operating properties, gas stations, golf courses and other properties built and used for one specific operation. BrookLex takes on any property that carries an MPAC value, including all of these.
What these properties have in common is that the building was designed around a single use, and the value of the business operating inside it is not the same thing as the value of the real estate. A hotel’s room revenue, a golf course’s membership income or a gas station’s fuel sales tell you about the business, not necessarily about what the land and buildings themselves are worth for assessment purposes.
Why MPAC uses the cost approach
Because there is little direct rent or sale evidence for these properties, MPAC often relies on the cost approach instead of the income approach: the cost to replace the building and site improvements today, less depreciation for age and condition, plus the value of the land. Every one of those components, replacement cost, depreciation and land value, is a place where the assessment can be checked against the property’s actual condition and use.
- Confirm the tax class and whether any part of the property is assessed as land only.
- Check that the replacement cost used reflects the building actually on site, not a different standard.
- Check that depreciation reflects the property’s real age, condition and remaining useful life.
- Confirm the land value component is reasonable for the site.
Special purpose valuation is specific to each type of property, so BrookLex reviews these files case by case rather than applying a single approach across all of them.
Land value carries more weight
On many special purpose properties, such as a golf course or a gas station, the land itself carries a large share of the total assessed value, sometimes more than the buildings on it. That makes the land value component, and how much land is included in the parcel being valued, an important part of reviewing the file, separate from the condition of any buildings.
Why not the income approach for these properties
Special purpose properties are typically built and used by an owner-operator rather than leased on the open market, so there is little independent rent evidence for MPAC to work from. The cost approach avoids relying on rent that does not really exist for that type of property.
Does BrookLex handle every special purpose property type
Yes. BrookLex handles any property that carries an MPAC assessment, special purpose properties included.
If you think your special purpose assessment does not reflect the property’s real condition or use, our assessment appeals service can review the file, and our tax refunds and rebates service covers situations such as damage or demolition under sections 357 and 358 of the Municipal Act. Appeal deadlines are on our key dates page, and owners of more than one special purpose property may want a portfolio review. You can also return to property types to compare against other categories, or contact us to talk through your specific property.