Back in April, MPAC started mailing out their 2016 property assessment notices to property owners across the province of Ontario. If you don’t have yours yet - keep checking the mail; they should all be out by the fall.
I’ve spoken to a number of clients recently about their assessments, and most are asking the same two questions:
- The assessed value is significantly less than what we know our property is worth. Is this normal?
- The assessed value has increased since the previous assessment. Does the municipality increase my property taxes by the same rate?
These are both excellent questions! Below are my answers.
The market value of your property is very likely going to be higher than MPAC’s assessed value.
While some assessments in the City of Toronto do come-in fairly close to market value, MPAC’s numbers are usually quite a bit lower than what the property would sell for on the open market. Sometimes the difference is quite significant!
It’s not uncommon to see MPAC’s assessed value be hundreds-of-thousands-of-dollars less than the current market value (depending of course on price point, location, etc.).
MPAC relies on a number of factors when doing their assessments, but apparently recent comparable sale prices don’t weigh heavily in the process!
Just because MPAC’s assessed value of your property has increased doesn’t necessarily mean you’ll pay more in property taxes.
In the City of Toronto, your property taxes should only increase if the value of your property has increased at a greater rate than the City average (unless of course the City has increased taxes as part of its budget requirements…).
Here’s a quote from the the FAQ section of the City’s property tax website:
- Reassessment at the municipal level, is "revenue neutral" and does not generate any additional revenue for the City. With a reassessment, the City must adjust the tax rate to remain revenue neutral, so no new funding comes to the City of Toronto as a result of property valuation changes.
- If your property value increases at a rate less than the City average, your property tax may decrease due to the reassessment.
- If your property value increases at a rate more than the City average, your property tax will increase due to reassessment.
- The City may need to increase taxes due to its budget requirements, however, this is separate and not related to reassessments.
Do you have any further questions about your assessment?
Maybe MPAC’s valuation actually seems too high to you, and you’re wondering if there’s cause to fight it? Give me a shout and I’ll be happy to provide you with the recent sales in your area. Who knows, you might be able to make a case…
If you’re thinking of making a move and would like to know how I can help, feel free to contact me for more info.