Whether a tenant or a homeowner, you should be as upset as Premier Dalton McGuinty about your property tax assessment. A week before Christmas, the premier said that assessments for properties in Ontario were “unrealistic,” although he then implied he wasn’t going to do anything about the problem.
Of course they are unrealistic. Assessments for the next four years have been based on the value of properties in mid-2008, when the market was at its highest. Values since then have gone down maybe 15 per cent, maybe more.
But we’ll be taxed as though properties are worth more than they are. It’s no different than being taxed as though your income is $50,000 per year when it is really only $40,000.
If you are a tenant, it is even worse. Rental properties are assessed at a higher rate than ownership properties. As some tenants have found, when their unit is turned into an ownership condominium, the property taxes go down more than $100 per month — simply because owners are not taxed as heavily as renters.
To establish a value, evaluators review the size of the property, then drive down the street and make a guess of what they think it is worth. The many crazy guesses have led to court cases and many investigations by government officials.
A better method of assessment is needed, one that is understandable and fair.
Assessment should be made simply on the size of the property and the size of the building. Both can be determined easily, without argument. Part of the tax can be on the property, part on the building, together being your property tax.
The larger the property, the more tax you should pay — since it costs more for the municipality to deliver services to a large lot than to a smaller one. (It costs more to run a snowplow past a 150-foot lot than past a 20-foot lot.) And since more people usually live in larger homes and use more water, sewage, recreation, transit and library services, larger homes should bear more taxes. (If you are wealthy and have a large house that’s almost empty, maybe it’s not unfair that you have to pay for that luxury.)
Now that everyone including the premier agrees the present situation doesn’t work, it’s time the city started to pressure to get a better way of assessing and establishing property taxes.
We’d all be winners.
– John Sewell is a former mayor of Toronto.
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