Ontario Court of Appeal’s Pivot on Property Tax Exemptions: Stamford Kiwanis

Municipalities across Ontario should take note of a significant recent decision from the Ontario Court of Appeal that reshapes how tax exemptions for charitable and non-profit organizations are interpreted and applied. The case, Stamford Kiwanis Non-Profit Homes Inc. v Municipal Property Assessment Corporation, 2025 ONCA 450 (“Stamford Kiwanis”), clarifies the eligibility criteria for property tax exemptions under s. 3(1)12(iii) of the Assessment Act related to “relief of the poor.”

Background: The Legal Framework

Section 3(1)12(iii) of the Assessment Act exempts from property taxation land owned, used, and occupied by charitable, non-profit philanthropic corporations “organized for the relief of the poor” and “supported in part by public funds.”  For years, the leading case interpreting that threshold was Religious Hospitallers of St. Joseph Housing Corp. v Regional Assessment Commissioner, 1998 CanLII 2943 (ON CA), which imposed a restrictive test focused on if the corporation itself provided relief to poor individuals “by some form of endeavour,” such as fundraising or direct management, rather than being a passive organization funded by external sources and itself providing no actual relief.

The Stamford Kiwanis Decision: A New Test

In Stamford Kiwanis, the Court of Appeal overruled its previous decision in Religious Hospitallers, expanding the interpretation of “organized for the relief of the poor.” Now, to qualify for a property tax exemption as land owned and used by a charitable, non-profit philanthropic corporation:

1. the primary purpose or use of the property must be relief of the poor; and

2. the corporation must operate at least in part for the relief of the poor, in that there must be an element of economic deprivation or need on the part of the corporation’s intended beneficiaries.

This new test is less onerous and better reflects the practical and operational realities of organizations operating in this space, such as affordable housing providers. In Stamford Kiwanis, Stamford Kiwanis Non-Profit Homes Inc. was found to qualify for the exemption: its sole activity since its inception was providing affordable housing for low-income residents, it located and acquired the properties, it directed the property manager contracted to manage day-to-day operations, and it was supported in part by public funds.

What Does This Mean for Municipalities?

While the relevant legislative requirements have not changed, the way they are interpreted has. Municipalities should anticipate assessments and appeals that reflect this broader test. Properties previously denied exemption under the old test may now qualify. However, this change will likely not be applied retroactively to past decisions.

Municipalities retain the right to challenge the application of tax exemptions, including those applied under the new Stamford Kiwanis framework. Any such challenges should focus on whether the facts and evidence support the exemption claim, specifically in respect of:

• Whether the property’s principal use is for the relief of the poor; and/or

• Whether the corporation’s beneficiaries exhibit economic need.

If a property is primarily used for commercial or revenue-generating purposes, or if the corporation’s beneficiaries do not demonstrate economic deprivation, the exemption may not apply. As always, municipalities should verify the facts and may dispute exemptions not properly grounded in evidence.

With the national push for increased affordable housing supply and challenging pro formas with high material, land, and transaction costs, municipalities should proactively engage developers and builders to consider how this new approach will apply in the local context.  Query whether and to what extent mixed-use or mixed-market residential developments will be able to demonstrate that the property’s principal use is for “relief of the poor.”  Note that providing affordable housing to low-income residents met that standard in Stamford Kiwanis. Evidence that tenants or program participants are income-tested, rent-geared-to-income, or otherwise qualify on the basis of need, will be central to this analysis.

Conclusion

Stamford Kiwanis marks a significant shift in the law, emphasizing the purpose and beneficiaries of organizations seeking tax exemption on the basis of philanthropic use, rather than their operational methods. Municipalities should update their assessment review protocols and consider whether to share this information with local organizations.

For further guidance on how this decision may affect your organization, or for help with specific exemption claims, please contact us.