8:30 a.m., Nov. 19)
market value reassessment and your taxes
been a lot of misinformation and confusion out there about
the latest round of property reassessment and the impact
it has on local property taxes.
been four years since the last round of reassessments
and since then residential property values have increased
significantly. The average increase in Ottawa is 26 per
cent. That's just over eight per cent a year, which is
a much better return than your average GIC or mutual fund.
just because the assessed value of your property has increased
26 per cent does not mean your property taxes are going
to increase 26 per cent. In fact, if you live in Orléans
your taxes will likely decrease.
me explain. Market value reassessments are designed to
be revenue neutral. In other words, municipalities are
not allowed to use reassessments to fill up their coffers.
example, if the average residential property value in
Ottawa has increased by 26 per cent, the city's property
tax rate must be reduced by 26 per cent.
there are variations in every city and Ottawa is no exception.
So if the assessed value of your home has increased by
more than 26 per cent then you will pay more, and if the
average value of your home increased by less than 26 per
cent you will pay less.
figure out how much reassessment will cause your property
taxes to go up or down, divide the increase in the assessed
value of your home by the newly assessed value.
an example. House A was assessed at $240,000 in 2008.
According to the MPAC letter they received last month,
the 2012 assessed value is $315,000 for an increase of
$75,000; $75,000 divided by $315,000 equals 0.23809 or
roughly 24 per cent.
in this case, the property taxes will drop by two per
cent. There is, however, one little catch, any increase
or decrease will be phased in over the next four years.
So in this case the property taxes will be reduced by
0.25 per cent in each of the next four years. But that
doesn't take into account any increase in your property
taxes passed by the City of Ottawa which is proposing
a 2.1 per cent tax increase for 2013.
the 2.1 per cent increase is passed, then the owner of
House A can expect their property taxes to go up 1.6 per
cent (2.1 per cent minus 0.25 per cent).
don't panic, if the assessed value of your house has gone
up 25 per cent. In fact, you should be celebrating. It
means you just gained 25 per cent in equity. That may
not mean much to you now, but it does mean a lot if you
want to refinance your house down the road, or end up
moving into a retirement residence.
of your home as an investment and enjoy the returns. If
the opposite occurred and the assessed value of your home
went down 25 per cent then you should panic.
story was made possible thanks to the generous support
of our local business partners.)
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