Report to: General Committee Date Report Authored: January 21, 2011
SUBJECT: 2011 Property Reassessment:
Year 3 Phase-in Summary
PREPARED
BY: Paul Wealleans, Director, Taxation
RECOMMENDATIONS:
1)
THAT
the report entitled “2011 Property Reassessment: Year 3 Phase-in Summary” be
received for information;
2)
AND
THAT staff be authorized and directed to do all the things necessary to give
effect to this resolution.
EXECUTIVE SUMMARY:
None.
PURPOSE:
This report provides a
summary of impacts related to the 2008 property reassessment for the 2009 to
2012 taxation years but in particular, the 2011 taxation year.
BACKGROUND:
The assessment of all
property in
OPTIONS/ DISCUSSION:
The next assessment update
will take place for taxation years 2013-2016, with the valuation date being
January 1, 2012. Table 1 below provides the valuation dates used for each
taxation year from 1998 through 2016.
Table 1: Reassessment Cycle
|
Taxation
Year |
Valuation
Date |
|
|
1998, 1999, 2000 |
|
|
|
2001, 2002 |
|
|
|
2003 |
|
|
|
2004 2005 |
|
|
|
2006, 2007, 2008 |
|
|
|
2009, 2010, 2011, 2012 |
|
CVA
increases phased-in over 4 years |
|
2013, 2014, 2015,
2016 |
|
The 2008 Provincial budget mandated a continuing four
year phase-in of assessment value increases, for all property classes. Residential
properties experiencing a valuation decrease were not phased-in and the full
reduction flowed through for the 2009 taxation year. Table 2 below provides an
example of how an assessment increase was phased-in.
Table 2: Phase-in
example
|
Assessed Value of your property |
CVA |
|
Property Value on |
$280,000 |
|
Property Value on |
$320,000 |
|
Over this 3 year period, the property value has
changed by |
$40,000 |
|
Phased-in property assessment over 4 years |
CVA |
|
2009 |
$290,000 |
|
2010 |
$300,000 |
|
2011 |
$310,000 |
|
2012 |
$320,000 |
Table 3 provides a property
class summary of the 2011 tax year by property class of the % change in CVA for
the 2011 taxation years.
Table 3: 2011
CVA Changes in Markham
|
Over-all Reassessment % Change From 2005 to 2008 |
2011 Phased-In % CVA Change |
|
|
Residential |
18.82 |
4.17 |
|
Multi-Residential |
18.81 |
4.58 |
|
Commercial |
31.61 |
6.87 |
|
Industrial |
31.99 |
6.62 |
|
Farm |
38.88 |
8.95 |
CVA changes arising from a
reassessment do not result in additional taxation revenue for municipalities.
Following a reassessment, municipalities are required by legislation to reduce
their tax rates by the same percentage as the reassessment increase, such that
the total taxation revenue from all classes remains revenue neutral. Therefore, a reassessment will result in some properties experiencing
reassessment-related tax increases, while others will see reassessment-related
tax decreases.
For example, in 2011, any property in the
residential class that experiences an assessment increase greater than 4.17%
will have a tax increase due to reassessment. Similarly, any property in the
residential class that experiences an assessment decrease greater than 4.17%
will have a tax decrease due to reassessment.
Residential Class
The residential tax
rate calculation is based on the entire residential property class, which
includes all properties that are assessed as residential. In addition to
residential homes, the class includes vacant residential land, co-op housing,
group homes, golf course greens and fairways.
The residential
property class has appreciated by 18.82% between the January 1, 2005 valuation
date and the January 1, 2008 valuation date.
For the 2011 tax year,
three-quarters of the reassessment increase is reflected in a property’s
assessment for 2011 taxation purposes. Any residential CVA decreases that arose
from the 2008 reassessment, was applied fully in the 2009 taxation year. The
average phase-in CVA increase for 2011 is 4.17%. For the 2011 taxation year,
the average assessed value for all residential property types is $436,000.
Table 4 below only
includes residential homes such as singles, semi-detached, town-homes.
The average assessed
value for residential homes in 2011 is now $458,000, up from $439,000 in the 2010
taxation year. In 2010, the published average assessed value for residential
homes was $440,092. The slight difference between that figure and this year’s
of $439,364 is due to the 2011 updated data received from the Municipal
Property Assessment Corporation (MPAC) that included assessment adjustments or
appeals that affected the residential homes during the 2010 tax year.
Table 4:
Residential Home (Year 3 Phase-in Increase)
|
Ward |
2010 CVA |
2011 CVA |
CVA Increase |
|
1 |
$580,104 |
$611,276 |
5.37% |
|
2 |
$477,334 |
$497,574 |
4.24% |
|
3 |
$478,356 |
$501,717 |
4.88% |
|
4 |
$391,718 |
$406,327 |
3.73% |
|
5 |
$384,596 |
$399,128 |
3.78% |
|
6 |
$548,171 |
$574,290 |
4.76% |
|
7 |
$408,977 |
$422,442 |
3.29% |
|
8 |
$386,797 |
$401,850 |
3.89% |
|
Total |
$439,364 |
$457,719 |
4.18% |
Non-Residential Classes
Properties within the
non-residential classes (commercial, industrial and multi-residential) will
experience varying degrees of taxation impacts as a result of the reassessment,
depending on whether properties are paying taxes at full CVA taxation levels, or
whether the amount of taxes payable are subject either to caps on allowable
tax increases, or claw-backs of tax
decreases. Capping/claw-back provisions within the non-residential classes have
been in place since 1998, and were implemented by the Province of Ontario to
mitigate the tax impacts that would have resulted from the introduction of the
new Current Value Assessment system in 1998.
Multi-residential
Class: Consisting
of 42 properties, the multi-residential property class has appreciated by 18.81
% between the January 1, 2005 valuation date and the January 1, 2008 valuation
date. For 2011, the phased-in average increase in CVA for the class will be
4.58%.
Commercial Class: The commercial
property class, containing 5,670 properties has appreciated by 31.61 % between
the January 1, 2005 valuation date and the January 1, 2008 valuation date. For
2011, the phased-in average increase in CVA for the class will be 6.87%.
Industrial Class: The industrial property class, containing 515 properties, has appreciated by 31.99% between the January 1, 2005 valuation date and the January 1, 2008 valuation date. For 2011, the phased-in average increase in CVA for the class will be 6.62%.
Ward-by-ward summaries
of the CVA changes for the residential and non-residential property classes are
attached.
FINANCIAL CONSIDERATIONS AND TEMPLATE: (external link)
None.
HUMAN RESOURCES CONSIDERATIONS
None.
ALIGNMENT WITH STRATEGIC PRIORITIES:
None.
BUSINESS UNITS CONSULTED AND AFFECTED:
None.
RECOMMENDED
ATTACHMENT:
2011 Property Reassessment Year 3
Phase-in Summary - Attachment