CFN – By now most property owners have received their assessment notice in the mail. The envelope that you received also contains information on the MPAC itself and how they came to arrive at the number they assigned to your property. According to their own literature “five major factors usually account for 85% of the value: location: lot dimensions: living area: age of the structure(s), adjusted for any major renovations or additions; and quality of construction.” The value that this corporation comes up with will determine the amount of property taxes that your municipality will charge you for the next 4 years. Please read it thoroughly because you may be surprised or even shocked at what you see there.
In my own case I found that MPAC believes that my property has increased in value by a whopping 40%. I couldn’t believe it. Nothing has changed in or around my house. I have not had any renovations done or even changed the landscape. The community has not experienced any economic surge or even unusual housing development. Properties do not sell like hotcakes here in Ingleside so how could the assessment increase by 40%?
I contacted three real estate agents from different agencies and the Cornwall and District Real Estate Board and asked for their opinion of the MPAC assessment increases. All of the agents expressed as much shock over the increase as I did. They suggested that it is normal to see a 2-5% increase in home values per year. According to MLS database the average residential sale price for South Stormont in the last 4 years was; 2008 – $167,502; 2009 – $176,426; 2010 – $194,538; 2011 – $191,867. That is only an increase of 12.7%, but then MPAC doesn’t use MLS numbers.
What can you do if you think the assessment is unfair? The information packet included with your assessment tells you to go to their web site www.aboutmyproperty.ca and log on using your Roll Number and access key that are listed on the bottom of your Property Assessment Notice. There you can see a comparison to similar properties in your area. You can also contact MPAC by phone or go to their local office. Basically they say you can appeal their value by using their RfR form and submitting it before April 1, 2013. The form is available online or by phone. You can also write a letter requesting reconsideration.
How does the assessment affect your property taxes? Municipalities use the assessed value to calculate how much property tax you have to pay. They are given an average value estimate of residential properties and then they apply the tax rate. If the municipality maintains their tax rate then if your assessed value goes up 40% your property taxes go up 40%. According to the finance report last night at the South Stormont Council meeting, the estimated average assessed value for residential properties have increased by 23.12%. Farm properties have increased by 49.51%.
Fortunately, municipalities have the ability to moderate the effect of higher assessment values overall by lowering the tax rate. However the residential taxes are composed of Township, County and School Board taxes and the township is typically only 31% of the total. In South Stormont the tax rate is decided during their annual budget meeting and is dependent on how much money they need to run the municipality. For the years of 2008 to 2012 inclusive the rates have been 0.427780%, 0.413513%, 0.413513%, 0.409390% and 0.415784% so you can see that your property taxes may not automatically go up the same amount as the assessed value of your property does.
The point is that as an individual homeowner if your assessment is 40% higher than the previous one, you are going to be paying 40% more than you would have at the previous rate and 20% more than the current estimated average increase. That is an unacceptable high increase. If you consider seniors who live on a fixed income that kind of increase in taxes is a hardship. Yes, their property will be theoretically worth more but what good is it if they have no intention of selling it. With a large jump in property tax some may be forced to.
The only recommendation I have been given, by both the real estate board and the municipality, is if you don’t think that you can sell your home for the assessed value then you should appeal the assessment.
I know I am.