The
Tax Man cometh!
The influx of mail at this time of year can be heavy enough to hide an envelope from the Municipality Property Assessment Corporation. However, it's one you shouldn't toss aside because you're too busy preparing for the Holiday Season. Rather, you owe it to yourself to see if someone has decided to NOT play Santa but has instead set about giving you a nasty shock as the New Year arrives.
The underlying cause for concern is the movement a few years ago to an Actual Market Value determination of the assessments that local municipalities use in calculating the tax bills they send out. It was -- and still is -- an excellent and well reasoned idea, far better and fairer than the "growed like Topsy" mishmash of assessments that existed beforehand. The intention was -- and remains -- that houses should be assessed on a like for like basis: each $100,000 house should pay about the same amount, just as every $200,000 one ought be getting billed for twice as much.
Like all good ideas, though, it isn't without
its quirks.
It extends to a judgement of changes in the real estate market in successive
two year periods, with the objective of having assessments keep pace with
increases in value. However, the transition isn't always as smooth
as it ought to be. Single digit percentage rises in assessed values
between one period and another reflect the general stability of the market
for the past several years -- and probably for a fairly long period of time
ahead. But reassessments of 20% or 30% or even more invite a healthy
degree of scepticism.
The reality is that, despite a few spurts here and there in the Niagara
Peninsula, property values haven't been leaping upwards to any alarming
degree for some time. Just as I said back in the spring (when
I began sending out these mailing pieces) that it was still a Buyer's Market,
I'll make the same claim nine months later. The market may have swung
somewhat in favour of its Sellers -- as in some respects it certainly has -- but
the gain is in the speed in which a house gets sold rather than in a
buyer's willingness to pay whatever a seller is trying to get.
Only an occasional listing has ended up with a sale above the asking price.
Most have been, at best, close to it, and enough have fallen shy of it.
In any case, if you have been advised of a
significantly different assessment for the year 2004 (and it will apply to
2005 as well), you probably have grounds for contesting it. Moreover,
there is an appeal process that's spelled out in an explanatory leaflet that
accompanied yourAssessment Notice, although the onus does fall on
you to do the work and make the effort it involves.
The key to a successful appeal is a Comparative Market Analysis:
a means of judging the true worth of a property by seeing what similar ones
are listed at, what they have recently sold for, and what higher prices
for them didn't attract buyers. It lies at the heart of my service
as an Exclusive Buyer Broker (which means I no longer list property but work
solely for buyers) and helps my clients get the "most house for the money."
But it's also supposed to form the basis of the (new) figures the Assessment
people arrive at every couple of years -- which, sad to say, it doesn't
always do.
You'll perhaps need the help of a real estate agent to develop an appropriate set of comparisons, although this isn't likely to cost you very much. But, to my mind, it's certainly better that letting a Grinch in the Municipal Property Assesment Corporation steal your Christmas!
If you'd care to call and discuss any of these
points with me, I'll be only too pleased to hear from you.
Thank you for your time.
Duncan Pollock, Real Estate Broker,
427 Gate Street, Niagara-on-the-Lake, Ontario, Canada L0S 1J0
Tel: 905-468-3154 Fax: 905-468-3812 Cellular: 905-704-9037
email: duncanpollock@sympatico.ca
Note: E-mail
addressed changed as above on Nov 3 2007
website: http://www.duncanpollock.com