Canada's Condominium Magazine
One of the benefits of being a property owner in a market like Toronto is that one can be fairly certain that the value of the property will increase, in some cases rather quickly. On the other hand, as a property’s assessed value goes up, so may the taxes on it. Every four years, the city determines the current value assessment (CVA) of every residential property, then informs the owners how that assessed value will affect their property taxes over the next four years. Today is the day the city began mailing a 2016 Property Assessment Notice to every property owner. Increases in assessment value are phased in over the next four years. In the rather unlikely event that the assessment value decreases, the taxpayer could see a lower tax bill immediately.
The Property Assessment Notice from the city gives the estimated market value of the property as of January 1, 2016. The assessment takes into account factors such as the property’s location, lot size, type of construction, number of bathrooms, proximity to hydro corridors or railway lines, the presence of green space nearby and even traffic patterns in the area.
The City of Toronto points out that the reassessment does not generate any new tax revenue for the city. When property values increase, the city has to adjust its tax rates so that the amount collected remains the same. Therefore, if a property’s assessed value has increased by the same rate as the average for the city, there “may” be no increase in property taxes. However, properties whose assessed value has increased by more than the city-wide average could see higher taxes.
Property assessment in Toronto is carried out by the Municipal Property Assessment Corporation (MPAC). It says that the average residential assessment increase will be 7.5 per cent in each of the four years from 2017 to 2020. The average assessed value for a “typical” home in Toronto for the new four-year assessment cycle is $770,000. The previous assessed value, from the year 2012, was $592,000. This means that over the next four years, the phased-in CVA will rise by $178,000, or $44,500 per year beginning in 2017. The average assessed value of a condominium in Toronto is $363,000.
The city advises that property owners should check their Notice of Assessment immediately. If they disagree with the assessment, they can file a Request for Reconsideration within 120 days of the issue date of the assessment notice. A review of the assessment will be done free of charge.
MPAC is an independent corporation funded by Ontario municipalities and accountable to the province, and to taxpayers, in compliance with the Assessment Act and regulations set by Queen’s Park. MPAC boasts that it is the largest such assessment organization in North America, with more than 5 million properties worth $2.3 trillion within its jurisdiction.