• SECTION 83 TOOLKIT: INDIAN ACT PROPERTY TAXATION SYSTEM

Under section 83 of the Indian Act, a First Nation may make by-laws for taxation of interests in land on a reserve. An interest in land* includes the right to occupy, possess or use lands in a reserve.

A First Nation wishing to charge property taxes pursuant to section 83 of the Indian Act must establish their property taxation system by passing property taxation and assessment by-laws, as well as annual by-laws, setting annual tax rates and authorizing the expenditure of property taxation revenues.

These by-laws must comply with all requirements under the Indian Act and applicable FNTC policies.

Each First Nation by-law is reviewed by the FNTC for compliance with all section 83 and FNTC policy requirements. By-laws that meet all requirements are then recommended for approval by the Minister of Indigenous Services.

• Section 83 Indian Act Property Taxation By-laws

First Nation Property Taxation by-laws create the framework for the administration of a real property taxation system under section 83 of the Indian Act.

A First Nation taxing under section 83 must have in place a property taxation and assessment by-law before it can levy and collect property taxes.

Property Taxation by-laws set out the requirements for:

• Appointment of a tax administrator
• Outline any exemptions from taxation
• Outline the preparation of the tax roll and tax notices
• Details for the payment of taxes
• Any tax abatement or granting programs
• Imposition of penalties, interest and refunds
• Provisions for the enforcement and collection of taxes
• The use and investment of reserve funds

The FNTC has established policies for First Nation property taxation by-laws that set out requirements for these bylaws.

Sample by-laws have been developed for each region in order to enable harmonization with provincial approaches where appropriate. See Policies, Guides and Samples on right sidebar: or below on small screens:

First Nation property taxation by-laws must comply with the Indian Act and the FNTC Property Taxation By-law Policy.

• Section 83 Property Assessment By-laws

A First Nation property assessment by-law creates the legal framework for conducting assessments of interests in land on reserve.

A First Nation implementing taxation under section 83 of the Indian Act must have both a First Nation property assessment by-law and a property taxation by-law in place before it can collect property taxes.

The property assessment by-law provides the framework for assessing real property interests on a First Nation’s reserve lands. This law requires council to appoint a qualified assessor to determine the value of property interests that will be taxed.

It sets out the duties of the assessor, the applicable rules and practices, establishes the property classes and provides for the establishment and conduct of the Assessment Review Board.

The First Nation property assessment by-law establishes the property assessment system:

• Sets out the duties of the assessor
• The applicable rules and practices
• Establishes the property classes
• Provides for the establishment and conduct of the Assessment Review Board

The FNTC has established policies for First Nation property assessment by-laws that set out requirements for these by-laws.

First Nation property assessment by-laws must comply with the Indian Act and the FNTC Assessment By-law Policy.

• Section 83 Annual Expenditure By-laws

First Nations taxing under section 83 are required to make an annual expenditure by-law.

This by-law provides the First Nation with the authority to expend revenues collected under its property taxation by-law for the current taxation year.

The annual expenditure by-law sets out how the First Nation:

• Intends to spend the property tax revenues it will collect
• Authorizes grant amounts
• Establishes reserve funds

The timing of annual expenditure by-laws is set out in the FNTC Expenditure By-law Policy. The policy provides for First Nations to make annual expenditure by-laws at least once for the taxation year to which the annual laws apply.

Expenditure of property tax revenues can only be made in accordance with a budget set out in an expenditure by-law. The annual budget must be balanced (i.e. budgeted expenditures must equal budgeted revenues).

First Nation expenditure by-laws must comply with the Indian Act and the FNTC Expenditure By-law Policy.

• Section 83 Annual Rates By-laws

Section 83 taxing First Nations must enact an annual rates by-law. This by-law establishes the rate of tax for each class of property and sets minimum taxes if used. Also called the mill rate, the tax rate is typically based on the budget requirements of the First Nation with consideration of the rates used by the adjacent local government.

The annual rates by-law sets out the:

• Tax rate for each property class (established in the assessment by-law) in which a First Nation has assessable properties.

The timing of when annual tax rates must be set is established in the First Nation’s property taxation by-law. The deadline for setting annual tax rates is set out in the FNTC policy for Annual Tax Rates By-laws. The policy provides for First Nations to make annual expenditure by-laws at least once for the taxation year to which the annual laws apply.

Annual tax rate by-laws enacted under section 83 must comply with the Indian Act, and any policies established by the FNTC. The FNTC has established policies for First Nation annual rates by-laws that provide further requirements for the form and content of rates by-laws.