New assessments to reflect rapid rise in real estate values for some
Double-digit jumps in assessments and resulting property tax increases are going to stun some homeowners this year, the president of the Toronto Real Estate Board warned yesterday, as a provincial freeze on new property assessments nears its end.
"They're going to be absolutely shocked," Maureen O'Neill said. "We've had a steadily rising marketplace and the homes are worth a lot of money, but they're only worth a lot of money if they sell. There's going to be a lot of people who bought their homes 10 years ago, and aren't going to be able to stay in them because of the taxes."
The board's reports show the average sale price of a single-family dwelling in Toronto has risen by about 20 per cent over the past three years.
Current property taxes are based on market value assessments conducted by the Municipal Property Assessment Corp. for Jan. 1, 2005, and are determined by comparisons with the average city property value. If the estimated value of a property increases at a rate below the city average, the homeowner's property tax will decrease. If property value increases at a rate above the city average, the tax will increase.
The provincial government cancelled assessments for 2006 and 2007 after a report by the Ontario Ombudsman criticized the methods used by MPAC, a Crown corporation, to evaluate properties. The revised assessment process is currently under way.
The reassessed values, with a valuation date of Jan. 1, 2008, will apply to the tax years 2009 through 2012. Increases in assessment values will be phased in over four years.
Mayor David Miller stressed that although property taxes may go up for some, the city is not allowed to take in any more revenue. "It is a difficult system because in a neighbourhood that is popular, taxes go up but the city does not get any more money," he said. "It is a provincial system and we have to live within it."
Below is the percentage change in average sale price, comparing the fourth quarter of 2004 with the fourth quarter of 2007.
Houses 44% Bloor West Village (detached bungalow) 38% Riverdale 31% Richmond Hill 29% Markham 25% BeachesCondominiums 74%
Waterfront 50% Riverdale 38% Etobicoke - Islington/Kingsway 35% Cabbagetown