Wednesday, October 29, 2008
Assessment Only Half the Picture
Starting next week, MPAC – the Municipal Property Assessment Corporation – will mail you and every other property owner in Niagara a new property assessment notice.
Updated for the first time since 2005, your notice will outline MPAC’s determination of the market value of your property as of January 1, 2008.
MPAC considers many factors when assessing property values, such as the sale prices of comparable properties in your neighbourhood, and the age, location, and size of your property and home. In essence, MPAC bases the value on the amount your property could have sold for on the open market.
Because of changes the Province made last year, your assessment will remain the same for the next four years. However, if the value of your property increases, that increase will be phased in over the four years; if the value goes down, you will immediately see a reduction.
For example, if the value of your home increased by $20,000 over its current assessment, the value for determining your property tax will increase by $5,000 per year over the next four years.
If the value of your home goes up, does that mean that your property taxes will also go up?
No, not necessarily. Market Value Assessment is only one half of the property tax equation. The amount you pay to the Town of Pelham, to the Region, and for Education is based on the Market Value Assessment of your home multiplied by the three tax rates and added together.
Say the Town budgeted for $10 million from property taxes in 2009. If all assessments double, the Town would cut the tax rate in half to collect that $10 million. If everyone’s assessments went down, we would increase the rate to collect the same $10 million.
But, what if your assessed value increases more than the average?
The property tax system is a bit of a blunt instrument. Municipalities set the tax rate based on the average assessment for each of the tax classes – residential, multi-residential, commercial, industrial, farm/managed forest, pipelines.
If your assessed value increases more than the average you will likely pay more than average. By the same token, if your assessed value increases less than the average, you will likely pay less tax.
The Town will be organizing open house sessions with MPAC so you and your neighbours can ask any and all questions after you receive your new Market Value Assessment notice.
Posted by Mayor Dave Augustyn