Page 118 - ESCARPMENT MAGAZINE | Winter 2013
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Escarpment Magazine Winter 2013
ALBERT EINSTEIN
lamented, “This is a question too difficult for a
mathematician. It should be asked of a philosopher", when asked
about completing his income tax form. We don’t know how he felt
about paying property taxes. In our region, Municipal Property As-
sessment Corporation (MPAC) provided new property tax assessments
that arrived in your mailbox in November, providing you with lots of
information — but — before you file that paper away until tax time, take
a closer look. You might be a little shocked. In fact, you might be
lamenting too.
Does your assessment make sense with what you think your property
is worth? If it’s too high, you have until March 31
st
to do something
about it for the upcoming tax year. The new assessment value assigned
to your property is MPAC’s assessment of your Current Value (CVA),
which basically means it is the value that MPAC thinks your property
would most likely have received on January 1st, 2012, if you had sold
it on the market. It is also the value that will ultimately be used to calcu-
late your property taxes. But it’s all relative. Even though your assess-
ment increased, it does not mean that your taxes will. It’s more about
your piece of the pie. Look at your assessment in terms of how the value
of your property has increased relative to the municipal average. If
you live in the Blue Mountains for example, MPAC estimates that real
estate values increased 9.88% from 2008 to 2012, that change will
be phased in over the next four years, or 2.47% on average per year.
If your full assessment has gone up 8% (2.0% for the year), your piece
of the tax pie just got smaller. We can’t promise a tax decline, that’s
up to the municipality and how they spend their money; but if we as-
sume that your local municipal budget stays pretty much the same, then
your overall tax bill would go down.
You’ll notice that MPAC is trying to lessen the shock value by phasing
in any increase. That means if you are the BlueMountainer mentioned
above, instead of a 9.88% increase in 2013, you will see a 2% in-
crease each year. If your assessment has declined, you get the full ben-
efit of that smaller piece of pie right away, no phase-in for you.
Generally, in our area, assessment increases have been less than the
overall Ontario market average increase of 18%. Northern markets
tend to have more variability, thus there is more likely a chance that
your assessment change is not reflective of the market around you, as
opposed to Joe Toronto who has had three sales on his street of com-
parable houses just this year. That means you should be paying atten-
tion to what your increase is and what your municipality is.
We suggest you look at your assessment from two different points of
view...
Question 1:
Do you think the value that MPAC came
up with is fair?
If you were to buy your house today, would you
be happy to pay the assessment value for it? Nobody wants to pay
taxes, but it’s hard to complain when you’re paying less taxes than
what your property is worth.
If your answer is yes, then you may want to stop worrying about that
little piece of paper. If not, then the next question is:
Question 2:
How does your assessment rate with sim-
ilar houses around you?
This one requires a little more work.
But it is something that you can do yourself. Look around your neigh-
bourhood and decide on a few houses that you feel are similar size,
quality, etc. to yours. You can access their assessments on-line through
MPAC’s website
(you’ll need the roll num-
ber and access key from your assessment), they are good at going
through this with you or we can always help you as well. You can ac-
cess up to 24 different property assessments for free through them.
How do these assessments fair against yours?
If you feel your own value is unjustly inflated relative to others, your
next step is to ask MPAC for an RfR, Request for Reconsideration. This
needs to be done by April 1
st
to affect this tax year. Remember, by de-
creasing your assessment this year, your taxes for the next four years
will be affected. An on-line form is available or they can send you one.
Your reason can be as simple as “I think my assessment is too high” but
they do prefer you to have some basis. We are also available to act
as your agent if you are not comfortable doing this on your own.
Once they receive the RfR, they may not even contact you. In most
cases, our experience has been that they will not come and re-inspect
your property unless you insist that they do so. Instead they will typi-
cally review your case from their desk and provide you with a Letter of
Response. They try to have a turnaround time of 60 days though it can
take a bit of time, but any changes are retroactive. The average as-
sessment reduction for property owners who have filed an RfR has been
close to $29,000 over the past five years (roughly 8%).
You have 90 days from the date of this Letter of Response to file an ap-
peal. This is not done through MPAC, you must directly contact the
ARB, an independent provincially-run tribunal board. You present your
case but the onus is on MPAC to prove the accuracy of their assessed
value. There are fewer appeals (less than 0.5% of assessments), though
they tend to have larger results.
All of these steps you can do yourself, though we are at HGAppraisers
are here to help you at any step along the way. From helping you with
your RfR, providing you with more assessment comparables, to provid-
ing you with an appraisal that you can take to MPAC — anything we
can do to make your case stronger. After all, it doesn’t take an Einstein
to understand that no-one wants to pay extra taxes.
|E|
This article has been provided by HG APPRAISERS INC.
Real Estate Appraisers - Realty Tax Agents.
For more information go to
HOW YOUR ASSESSMENT
AFFECTS YOUR TAXES
AND WHAT YOU
CAN DO ABOUT IT
Property Tax
Assessments
REAL ESTATE
|
property tax assessments
