Wednesday, January 28, 2009

Stay Tuned on Tax Rates and Property Assessments

You may recall that in October, just prior to the Municipal Property Assessment Corporation (MPAC) sending out its Market Value Assessment notices, I wrote about how Market Value Assessment is only one half of the property tax equation.

I wrote then that the amount you pay to the Town of Pelham, to the Region, and to the Province for Education is based on the Market Value Assessment of your property multiplied by the tax rates.

Your Property Taxes = Your Assessment X Tax Rate

Your Assessment:
Your assessment is solely set by MPAC. The Town and the Region cannot change any element of this assessment process. It is mandated by the Province, who has established a separate corporation – MPAC – to administer it. If you think your assessment is incorrect, please contact MPAC directly and ask for a Request for Reconsideration; you have until March 31, 2009 to request this.

Tax Rate:
Your tax rate is set by the Town, the Region, and the Province (for the Education portion).

2008 Rate % of Total
Pelham: 0.005085950 = 33.3% of total
Region: 0.007547470 = 49.4%
Education: 0.002640000 = 17.3%
Total: 0.015273420

Municipalities set the tax rate based on the total assessment for each of the tax classes – residential, multi-residential, commercial, industrial, farm/managed forest, pipelines.

Just because your Assessment increased by 32% over four years, it does not follow that your property taxes will increase by 32%. In the same way, it does not mean – as one Pelham resident thought when her assessed value increased by $25,000 each year for four years – that you must pay the Town the annual increase in assessment listed on the notice you received.

What happened last time?
As you may recall, this is not the first time that all classes of properties have been re-valuated. Your property taxes for 2006, 2007, and 2008 were calculated on the value of your property on January 1, 2005. Your 2004 and 2005 taxes were based on the value set by MPAC for your property on June 30, 2003; your 2003 was based on the value on June 30, 2001.

The last time this re-valuation occurred, Pelham residential assessments increased an average of 16.98%.

What happened to the Pelham residential tax rate? It actually decreased by 9.7% from 0.005131980 to 0.004632850.

If your assessment increase was average, that change in effect meant the previous Council increased Pelham taxes by 5.6% in 2006.

What about this Council? We are still working our way through our 2009 budget process. Stay tuned for the net effects!