As published by The Erin Advocate
A sharp rise in Erin property values from 2005 to 2008 has pushed up tax assessments by about 26 per cent, but that does not mean property taxes will increase by a similar amount.
Property owners in Erin received assessment notices late last year advising that the average assessment increase will be 6.53 percent for 2009 – the first of four major annual increases.
The Municipal Property Assessment Corporation (MPAC) calculates the assessed value of almost 4.7 million properties in Ontario. With that volume, mistakes and inaccuracies do occur.
Is your assessment level fair? MPAC has a website that lets you check the accuracy of information upon which your assessment is based, and that it is consistent with similar properties in your area.
If your property was assessed at $300,000 on January 1, 2005, the average increase for Erin puts it at about $378,000 as of January 1, 2008. Under Ontario’s new assessment system, instead of increasing the assessment by the full amount right away, the 26 per cent increase will be phased in from 2009 to 2012.
Unfortunately, tax assessment will always be a bit confusing, since the fluctuating values of real estate are not directly linked to the rate of inflation or the costs of running a municipality.
To cut through the confusion, it is important to understand that your assessment is only one factor in calculating your actual tax bill. Once the Town and County determine how much money they need to raise from property owners, your assessment simply determines what your share of the total cost will be. People with more valuable properties must pay a proportionately larger share than those with less valuable properties.
Look at your assessment notice. It will state your 2009 assessment increase as a percent figure. If it is higher than the average of 6.53 percent, it means your property value increased more than most others in Erin, and so you will pay a slightly higher share of the total tax burden. If it is less than average, your share will be slightly lower.
Of course, everyone is likely to pay more overall, since the total costs of public services tend to rise. Tax increases are primarily driven by the budgets of the Town and County and the Province’s education tax rate.
When you get your tax bill, there is a simple formula: assessed value multiplied by the tax rate equals the amount you pay.
Sharon Marshall, Erin’s Finance Director, said that when assessment levels rise, the town may set its “tax rate” lower, so the end result is a reasonable tax increase. The budget process assesses how much extra revenue is needed just to maintain existing services; council then decides where to make improvements or cutbacks.
About 21.4 percent of your total tax dollar goes to the Town of Erin, 58.3 percent to Wellington County and 20.3 percent to the Ministry of Education. Assessment in Erin is rising faster than in most parts of Wellington, so our share of County expenses is increasing.
New assessment value in the system (from new homes, businesses and property improvements) does spread the tax burden more widely, but growth also results in extra costs for municipalities. Marshall said the Erin residential tax base has expanded by about one percent in 2008, and the commercial/industrial base by about two percent.
For details on how your property was evaluated, enter the User ID and password from your assessment notice on a section of the MPAC website, www.mpac.ca, called AboutMyProperty. You will see all the relevant details that are crucial to assessment, like sale price, location, lot size, frontage, total building area, living area, age of home and additions, finished basement area, garages, pools, fireplaces, number of bathrooms and bedrooms, and the type of heating. Make sure they are accurate.
Once you have your profile, you can get all the same information on up to 24 other properties in Erin – just enter the addresses. It is all public information, and it appears as a chart with your property details in the first column. Just read across to compare assessed values and features.
You may not care whether your neighbour has two and a half bathrooms, or maybe you do. The main thing is to decide whether you think your assessment is fair.
If you want MPAC to review and change your assessment (at no cost), you must submit a Request for Reconsideration by March 31. If you wait until you get your final tax bill in July, it will be too late to challenge the assessment.
If you disagree with the review, you can then file an appeal to the Assessment Review Board, where the onus is on MPAC to prove the accuracy of their assessment.
The key factor, according MPAC: “Ask yourself if you could have reasonably expected to sell your property for its assessed value on January 1, 2008.”
The fact that property values have dropped, and your house is now worth less than its assessed value, does not affect the fairness of the system, says MPAC. They point out that even if the date could be changed, it would affect everyone equally: “If all properties were reduced proportionally, the share of the tax burden allocated to each property would not change.”
