The Budget proposed the following changes to the property tax system:

• Legislation to implement a new assessment cycle for the 2006 and subsequent taxation years will be introduced. This new cycle will result in reassessments being based on property values as of January 1 of the preceding year, which is six months earlier than the current valuation date of June 30. This change is intended to provide additional time to for the Municipal Property Assessment Corporation to prepare assessments and taxpayers additional time to review such assessments. In order to facilitate the transition to this new assessment date, it is proposed that the reassessment that would have been conducted for 2005 will be cancelled. Property assessments for the 2005 taxation year would be based on valuations undertaken on June 30, 2003, the valuation base for the 2004 year. Annual assessments will be undertaken thereafter.

• Legislation deferring the implementation of assessment averaging will be introduced. Assessment averaging was introduced in the property tax reform legislation enacted in 1997 and was intended to commence in 2005. The government plans to undertake consultation and analysis of alternative assessment stabilization measures for residential and business properties for 2006 and subsequent taxation years.

• When current value assessment was implemented in 1998, a capping mechanism was introduced that required municipalities to limit annual assessment-related tax increases on affected properties to five per cent of the previous year's taxes. Proposed legislation will provide municipalities with a range of options to modify this capping program in order to increase progress towards the full implementation of the current value assessment mechanism. These proposals, which are intended to be available for 2005 and subsequent taxation years, would permit municipalities the option of phasing in current value assessment in several ways.

• Starting in 2005, regulations relating to conservation and ecologically sensitive land, and the property tax exemption system relating thereto, will be amended to enhance the eligibility criteria for the conservation land property tax exemption program for lands with natural and environmental significance owned by conservation authorities and conservation land trusts.

• A new financing device will be available to help municipalities provide support for the cleanup of "brownfield" sites.

• Consultation with northern communities will be undertaken in 2004-2005 to determine the best way to implement improvements to the provincial land tax.