Have You Gotten Your Property Assessment Yet?
There’s another problem going on with real estate in Toronto. And in fact, all over Ontario. This time it has little to do with rising (or falling) home prices and sales, but rather the assessed value of the property homeowners are already living in. That’s right. It’s property assessment time. And some homeowners might be shocked to find out just how much their property value has gone up – and their property taxes to go along with it.
Ontario’s Municipal Property Assessment Corp. (MPAC) started mailing out the property assessment notices last month and they’ll continue on into next month, and the assessments could be quite a bit higher than what most homeowners were expecting. Since the last update in 2008, MPAC has found that on average, property values have risen 18 per cent. This means that property taxes could go up, at a time when interest rates could rise, and when homeowners are more strapped for cash than ever.
“Our values reflect local real estate markets and confirm that most homeowners in the province have seen the value of their homes increase over the last four years,” says Larry Hummel, MPAC’s chief assessor.
But there may not be reason to panic just yet. If the percentage of a home’s property value increase is the same as the average increase for any given municipality, there’s a good chance that no additional property taxes will be due. However, for those that have gone over and above that average, more fees are likely on their way.
That’s a problem for some homeowners, especially those that are well above the average percentage in their cities and towns. And some are actually crying out that the assessments aren’t really all that fair.
That’s because the last time the assessment was done was in January of 2008, just as the recession was hitting and all markets were starting to take a hit. Property values, and the price of Ontario mortgages, only decreased slightly during this time, but they spiked in January of 2012 – which is the date the assessments are based on. This was the peak of Ontario’s housing boom, and a time when property prices and values were soaring. Now they’ve come back down a lot closer to Earth, yet homeowners are still being judged on what their property value was worth during this boom. And the fact that values are now falling in many Ontario neighbourhoods doesn’t seem to play a part.
So what can you do if you think your property assessment is unfair or incorrect?
“Property owners should ask themselves if they could have sold their property for its assessed value on January 1, 2012. If the answer is yes, then their assessment is accurate. If not, we are committed to working with them to get it right,” says Mr. Hummel.
So while you may not be able to get out of that high value, simply because it’s based on a time when the market was high, MPAC can help you try to sort it out if the numbers are way off.
However, if they’re not, and your property value has gone up considerably – especially compared with other properties in your city – you can expect to pay additional property taxes. Out of the 5 million property owners in Ontario, those that have extra taxes to pay will see an increase of 4.5 per cent each year for the next four years, according to MPAC.