Novocastrian

You wouldn't and don't. Except for the small problem that property taxes are the overwhelmingly largest source of funds for a city. But the idea of tying the assessed value to a cities budgetary needs is ludicrous.

Why not just vary the mil rates?

HGerchikov

I think you are both saying the same thing, the highlighted in red text from Steve's post is the basis for the mil rate calculation in Novo's.

Steve_

Perhaps that is how the mil rate is calculated to begin with, but effectively that's a percentage of each individual property value so when property values go down, revenue goes down. The Calgary way prevents that.

Really is Calgary the only city in Canada that does it this way? I thought it was novel when I got my first property tax bill but I thought it was more widespread.

HGerchikov

No it doesn't because if property values go down, the mill rate goes up, so revenue stays the same.

Steve_

No it doesn't, not automatically anyway. The mill rate is a simple percentage of the value of the property, so if the property goes down in value, the property tax goes down too: https://en.wikipedia.org/wiki/Property_tax

That's not how it works in Calgary.

Novocastrian

From your wiki link...

"Canada
Many provinces in Canada levy property tax on real estate based upon the current use and value of the land. This is the major source of revenue for most municipal governments in Canada. While property tax levels vary among municipalities in a province there is usually common property assessment or valuation criteria laid out in provincial legislation. There is a trend to use a market value standard for valuation purposes in most provinces with varying revaluation cycles. A number of provinces have established an annual reassessment cycle where market activity warrants while others have longer periods between valuation periods.

Calculating Individual Property Taxes

In Ontario, for most properties (e.g., residential, farms), the property taxes can be calculated by multiplying the phased-in assessment indicated on the Property Assessment Notice by the tax rate.

Municipal tax rate x phased-in assessment for the particular taxation year = municipal portion of tax

county/regional tax rate x phased-in assessment for the particular taxation year = county/regional portion of tax

education tax rate x phased-in assessment for the particular taxation year = education portion of tax

municipal portion of tax + county/regional portion of tax + education portion of tax = Total Property Tax

In some cases (e.g., commercial, industrial, multi-residential properties), the Province or municipality may implement measures that affect the actual taxes paid on a property."

I see no suggestion that the millage rate is immutable or that the assessed value of a property is based on a fraction of the municipality's budget needs.

HGerchikov

I think we have a terminology issue here. The mill rate referred to in Novo's post is also called the tax rate and is calculated by the total required budget divided by the total assessed value of all properties. Taxes for an individual property are the tax rate x the assessed value of that property. If the values go down then the tax rate will go up.
I think that is the same as you are saying for Calgary.

Novocastrian

I agree that the debate is to a certain extent semantic, but if we think of Federal budgets instead, if the budgetary requirements increase then it is the various tax rates, for example income tax rates, that change. It would be absurd (although perhaps welcome) to instead increase everyone's income.

Steve_

I wasn't talking about Ontario I was talking about mill rates...

I.e. a percentage, which is what I said, but that's usually an arbitrary figure, so if it's fixed then when the value goes up or down the tax revenue goes up or down as a direct result.

This is the Calgary method: The City of Calgary - Tax bill and tax rate calculation

I.e. tax rate = total revenue required (i.e. budget) divided by total assessment which equals 0.0061029, that's the mill/tax rate (which changes annually).

So say your house is worth $300,000 x 0.0061029 = $1830

So basically, values go down, tax rate goes up, value goes up, tax rate goes down, assuming the budget remains the same - thereby keeping the tax you pay the same (assuming no new properties either). If the budget goes up then the tax rate goes up because it's a larger number to divide.

So assuming the assessed rate goes up consistently across the city, there is no point moaning about the assessed rate of your home. Only if they're picking on you is there a point to it.

Novocastrian

I don't often agree with your points of view and I also don't think you are either stupid or unfamiliar with financial practices, but you (at least appeared to) have claimed that the Assessed Value of properties in Calgary are arbitrarily set year to year based on the City's budgetary needs.

Having read all you've posted you're simply wrong. The mil, mill or millage rates i.e. the rates of tax are varied. Not the assessed value.

It doesn't of course affect your property tax bill one way or the other and is perhaps therefore semantic, except that assessed value is something quite different to what you owe on property tax this year or next.

Steve_

That's not what I said at all, not even remotely. The assessed value is based on the actual value of the property, the point is that the assessed value doesn't necessarily mean you will pay more property tax as a result. Mill rates are usually arbitrarily decided, that is not the Calgary method. The assessed value is instead fairly meaningless in determining the property tax PROVIDED the assessed values go up consistently. They have to pick on your property in particular for it to make a difference.

Re-read what I put in the above post.

Novocastrian

I'm beginning to wish we'd never started this discussion , but how can the assessed value of a property be based on the actual value of the property and at the same time be a fixed percentage of the city's budgetary requirement next year or this?

The obvious conclusion would be that if the city cut its budget, the average selling price of the properties would magically decrease. That's nonsense.

Tinpusher63

This is impossible to determine until a person lists and sells their property.

So your statement is meaningless.

Maybe you should have another read of how Calgary does it's assessments.

The City of Calgary - Property Assessment FAQs

orly

What's the problem?