Exactly how will the updated property assessment notice affect you?
You’ve just opened your mail from MPAC- it’s your new “Property Assessment Notice” and in a nice little box it says “This is not a tax bill”. No it’s not a tax bill, but it will probably have an impact on your property taxes. This notice is telling you what MPAC feels your house is worth. The more they think your house is worth- the more property taxes you’ll pay. There’s no hiding the facts; Hamilton’s property taxes rank amongst the highest in Southern Ontario. A City report in 2014 showed that at the time of the report, Hamilton taxes were 9% higher than most medium to large sized municipalities in Ontario.
Good news for property owners: Hamilton real estate values continue to climb.
Hamilton has been making headlines. In September, 2015, the Canadian Real Estate Association reported that the average price of a home in Hamilton shot up more steeply than any other part of the country, citing an increase of 16.4% for the period of August 2014- August 2015. Today, the REALTORS® Association of Hamilton-Burlington released its statistical report indicating that the market doesn’t appear to be slowing down.
Bad news for property owners: it’s property assessment update time
MPAC, the Municipal Property Assessment Corporation has just mailed out their new property assessments. Without a doubt you’re going to be elated to see that your property value has gone up; in some cases it will be significant. MPAC has reported that values went up an average of 18% since their last assessment. The big question is how will it reflect on your future tax bills.
- Hamilton still struggling with high taxes but making progress
- MPAC: Property assessments up an average of 18%
So how does all of this work? Every year the City sets its “mill rate”. You multiply the mill rate with your MPAC property assessment and voila! You’ve got your property taxes.
Understanding your 2016 MPAC Assessment update
Use your property assessment to calculate your property taxes
When you get your new assessment, compare it with your previous assessment and see what the difference is. Divide the difference by 4. Every year, your assessment will go up by that amount. Example. Your current assessment is $300,000. Your new MPAC assessment shows a value of $360,000; the difference is $60,000. $60,000 divided by 4 is $15,000, so every year the assessed value on your house will increase by this amount. You can then visit the City of Hamilton’s nifty tax calculator to figure out what your new tax bill will look like. Warning: you may want to be sitting down. In the example given, the $15,000 increase will translate into a $200.00 increase in property taxes each year for the next 4 years.
Will the new Hamilton property assessment reports impact the real estate market?
Since the increase is phased in, the first year won’t pack too much of a punch and shouldn’t have a huge impact on buyers qualifying for a mortgage; it may have a slight negative effect on first time buyers who are stretching every single cent of their earnings to qualify for a mortgage. The true impact will be a few years down the road. Without factoring in the City’s annual increase in property taxes, the new assessments may see a property tax increase by hundreds of dollars in many sections of the City. With the average assessment increasing by 18%, we’re bound to see some major increases. Good news for the City coffers; bad news for homeowners who are already living in one of the highest taxed cities in Ontario.
If you’re buying a home avoid surprises; ask your Realtor® what the new assessed value is for any home you may be interested in.
Notices to appeal must be launched 120 days after you receive your Notice of Assessment; MPAC