Higher assessment doesn’t mean tax hike

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This article was published 13/01/2011 (5548 days ago), so information in it may no longer be current.

When the city sends you a letter notifying you that your house has increased in value, the tendency is to freak out. But there’s no need to do that just yet.

Every one of Winnipeg’s approximately 208,000 residential properties and 25,000 commercial properties will be reassessed this year — and almost all of them are worth more now than they were two years ago.

“Everyone knows what’s going on in the housing market. Most homes are appreciating,” Mayor Sam Katz said Wednesday.

Between April 1, 2008 and April 1, 2010, the average Winnipeg residential property increased in value by 12 to 15 per cent.

But an increased assessment does not necessarily translate into paying more property taxes in 2012. The reality is next year’s tax bill depends on the value of your home compared to every other Winnipeg property — as well as the political machinations at budget time.

“At this point in time, it’s impossible to say what your taxes will be in 2012,” said Nelson Karpa, Winnipeg’s assessment and taxation director.

However, there is a way to surmise whether you’ll have to pay more property taxes next year. Here’s how the counterintuitive assessment process works:

 

Why does the city reassess the value of my home?

Every two years, the city checks to see whether the assessed values of residential and commercial properties in Winnipeg conform to their actual market value.

 

How do they come up with a number?

Generally, by comparing your home to other properties that recently sold in your area of the city, provided they’re roughly the same vintage, condition and size. Across the city, the average residential increase was 12 to 15 per cent.

 

Why the range?

The average increase varies from neighbourhood to neighbourhood. In River Heights, it was 15 per cent. In North Kildonan, it was 12 per cent. Individual properties within those neighbourhoods vary as well.

 

So if my assessment goes up, will my property taxes go up?

The value of your home is not the determining factor. What matters is how much it increased over the past two years in comparison to all city properties — both commercial and residential.

 

How does this work?

If the value of your home increased at roughly the same rate as most other properties in Winnipeg, you may not be asked to pay more taxes in 2012. But if your increase exceeded the combined commercial/residential average, you can expect to pay more taxes.

 

My taxes went up after the 2008 reassessment. How could that happen if there was a tax freeze in place?

Between 2003 and 2008, the average increase in residential property values was 78 per cent. If your property increased in value by more than that, you started paying more property taxes in 2010.

 

How was that a freeze?

Because the overall pool of property taxes the city collected did not increase. Some property owners paid less.

 

What about commercial properties?

The city is reassessing them as well and will calculate the average commercial property increase later this year. They will affect residential property taxes, even though there are only about 25,000 commercial properties.

 

Why is that?

If you look at property tax revenue as one big pot of money, commercial properties account for about 40 per cent of the cash and residential properties account for the other 60 per cent. Since commercial properties tend to increase in value at a lower rate than residential properties, the city-wide average increase will likely be slightly less than 12 to 15 per cent.

That means the threshold required for you to avoid paying more property taxes in 2012 will be slightly lower as well. But all this assumes city council will not increase property taxes in 2011 or 2012.

 

Will there be another tax freeze this year?

Possibly, but not certainly. Katz has said he views a tax increase as a last resort. But he may not have much choice, if the city can’t find enough revenue to cover the increasing cost of delivering services.

 

When will I hear about my new assessment?

The city mailed out the first batch of 2012 reassessment preview letters on Nov. 5 to 70,000 homeowners. Another 62,000 letters went out on Jan. 7. The final 76,000 letters will go out on Feb. 11.

 

What if I don’t like my assessment?

If you just received a preview letter, you can discuss it with city staff at Waverley Heights Community Club from Jan. 24 to 27. Call or email 311 for an appointment.

If you received your preview letter in November, call or email 311 and ask for an assessor to look at your file. If you have yet to receive a preview letter, wait until February.

 

Can they change my assessment?

Assessors have the power to make changes if they learn they’ve made a mistake. For example, if your file claims you have a garage and you do not, that, too, would be a mistake. But if you just don’t think your property is worth more and have no argument to back up that opinion, you’re out of luck.

 

How long do I have to gripe about my assessment?

Until the end of March, when the city begins preparing the final notices to be mailed out in June. “It takes time to print 220,000 pieces of mail or more,” Karpa said. “We can’t adjust the roll at the last minute.”

 

What if I miss that deadline?

After you get your final notice in June, you can appeal your assessment to the city’s Board of Revision. But it’s easier to deal with the issue now, while adjustments can be made that do not involve a quasi-judicial body.

 

bartley.kives@freepress.mb.ca