Property Taxes - Are Yours Fair and Equitable
By now you have paid your final tax bill on your property here in Ontario for 2009.
Understanding how your assessment is calculated and the effect it has on your property tax bill begins with a very simple formula.
assessment x mill rate equal your tax bill
That is where the simplicity ends.
Due to the reassessment carried out for your 2009 tax bill yours may have gone down, but more than likely they went up even if your assessment did not go up more than the average. This was due to the increase in spending by your local city or municipal politicians and is reflected in the mill rate.
As property values fluctuate across a municipality your portion of the overall tax bite will change relative to your neighbours. Another factor that will affect your property taxes is how the assessment is calculated. Most taxpayers believe that the "Market Value" of their property is the driving force behind their tax bill but what they do not know or understand is that may not be the case.
The assessment folks use complicated formulas that are based on information that includes personal subjective opinion. This information is then massaged and manipulated by the formulas created by the assessment folks so that it resembles their version of the current value of your home. It is this current value or assessed value that is used in the calculation above.
Without making any changes to your home you may find that your assessment changed dramatically from what it had been relative to comparable properties in your area. Simple things like moving of a boundary line used in the calculation can have an effect. Other things that may affect it could be, environmental issues, proximity issues, wetlands, right of ways and the list goes on and on. If the assesor or the formula fails to reflect all the issues that also affect the value of your home the assessment will not be accurate and you may be paying more than your fair share.
Here are some links to a series of posts on assessment and mill rates that you may find informative.
You and "YOUR" Propertry Tax Bill -- Property Assessment Open House Sessions
You and "YOUR" Propertry Tax Bill -- Assessment Errors Can Be Costly
Understanding Residential Property Assessment in Ontario - #7 in a series on property taxes
You and "YOUR" Property Tax Bill -- Is Your Assessment Fair and Equitable
You and "YOUR" Property Tax Bill -- OUCH!!!!!
You and "YOUR" Property Tax Bill -- Your Assessment Notice Is In The Mail
You and "YOUR" Property Tax Bill -- Mill Rate Idiosyncrasy's
You and "YOUR" Property Tax Bill -- Is Current Value Assessment (CVA) A Better Way?
You and "YOUR" Property Tax Bill -- Who Takes The Biggest Bite?
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Kathy Clulow Sales Representative RE/MAX All-Stars Realty Inc.. Brokerage 905.852.6143
Each office independently owned and operated Not intended to solicit clients already under contract
Hi Kathy....In our area, proposition two and a half keeps a lid on real estate taxes.....every year the town needs more funding and there is always a special vote to override that proposition.....and it's the same result every year....NO OVER RIDE.... there is always waste with tax funds.....the town boards need to be more disciplined and stick to their budgets.....it's a viscious cycle....more often than not, the schools take the biggest hit!!!
Kathy, I know people who own homes worth twice as much as mine, who pay a lot less taxes than I do. This system really sucks.
Barbara - a greater portion of the funding for educational taxes was shifted to the province hear in Ontario a few years ago. In order to offer similar education opportunities across the province it (public school education) is better funded by the province rather than each individual school boards assessment base with all their disparities.
Sylvie - Barrie has case history that may explain some of that difference but if it is that bad you should appeal you assessment. You should read some of his posts .... links above
Hi Kathy, I did appeal and after getting sick of hearing from me, they finally gave me a small break... but it was a very small drop they decided on.
Still, better than nothing, I guess.
Sylvie - Barrie says that sometimes you get what he calls a gimme ... a 5% reduction for your efforts
Hi Kathy,
This was a very succinct explanation of how assessment of property values is done. I wonder if the same "subjective" factors are used here in the states, because seriously, how properties in my area are being assessed actually makes no sense to me at all.
William - It is my understanding that the same or a very similar process is used in many jurisdictions around the world