Home Owner Tax Fighter Guide
Tips To Ensure You Pay Your Fair Share Of Property Taxes - And Not a Penny More!
- How your property taxes are calculated.
- How you can tell whether your assessment is fair.
- How to appeal your assessment.
Note to the Homeowner: In our opinion, most assessment authorities try to be fair in assessing your property. Given the sheer number of properties they must assess, however, it is almost impossible for them to be fair to everyone. Your concerns and input to the assessor is vital if the system is to work fairly for all concerned. It is your right, and responsibility, to work with the assessors to ensure that your assessment (and taxes that result from it) are fair in relation to all other taxpayers in your community.
How To Use This Report
To the best of our knowledge, the information in this report is accurate everywhere in Canada. We've gone to considerable lengths to research this information carefully but the property tax system is complex and varies from place to place, so some facts may have slipped through our net. If we've missed something, please let us know.
All Canadian homeowners have something in common. Every year we get a bill for property taxes. And every year we're at least a little mystified by it.
We ask ourselves:
- Am I paying more than my fair share?
- If I am paying too much, how do I go about paying less?
Its purpose is to guide you through the maze, give you plain answers, and tell you where you can get more information if you still have questions. So...let's get started!
The Property Tax: How It All Began
When this happens, it usually isn't because the tax assessor is sloppy or unfair, it's because tax assessors have to make a lot of assumptions and sometimes these assumptions (or even the government's records) are faulty.
How The Property Tax Works
The property tax is based on what the government thinks your real property - the buildings and land you own - is worth. The key word there is "thinks." In principle, it works quite simply:
Tax assessors calculate what they think is the fair market value of every property in the municipality. In some municipalities they do this every year. In others, it can be years between assessments.
The municipal government makes up its budget for the year. It divides that budget into the total assessed value of all the properties in the municipality. The result is what is called the "mill rate". This mill rate is expressed as so many dollars of taxes per year per $1,000 of assessed property value.
In most places you can appeal the assessed value of your property, but not the property tax itself. Once you have accepted the assessor's opinion of your property's assessed value, the calculation of the actual property tax is automatic.
In other words, you can't appeal your "taxes". You can only appeal the government's assessment of your property's value. If you think their assessment is too high, you have to produce evidence that shows the assessor made a mistake. Later in the report, we will show you how.
Assessments, Mill Rates, and Taxes: How They Work
- Assume your municipality has a budget of $1.5 million this year.
- Assume the total assessment of all properties in your municipality is $750 million.
- In this case, the mill rate will be $1.5 million divided by $750 million, or 20 mills. (In other words, $20 of tax per $1000 of assessment).
- If your property is assessed at $300,000, then your property tax will be $300,000 times 20 mills per thousand dollars of value, or $6,000 per year.
How Do They Determine "Assessed Value"?
Why Does The Assessed Value Of Your Property Change?
If Your Assessment Goes Up, Must Your Taxes Go Up?
One warning: Don't expect your appeal to be heard quickly. In several provinces there are lengthy backlogs of appeals already in the system.
What If I Appeal, And They Increase My Assessment?
There is no guarantee and you have to take the chance. However, the odds are good that it won't happen. According to a 1992 study done in one province, when people appealed their assessment to the second level of appeal, over 46% of cases received reduced assessments, 50% were unchanged and only 3.5% received a higher assessment. So if you do your homework and you have a strong case, the odds are on your side.
Are There Any Tax Relief Programs Available For Property Owners?
Some areas offer tax relief programs or tax exemptions for certain kinds of property owners. For example, in some provinces there is tax relief for:
- People who employ energy-saving devices such as solar panels.
- Volunteer firefighters.
- War veterans, low income families, senior citizens or widows.
- Check with your local assessment office to see whether tax relief is available in your municipality and whether you qualify for it.
ASSESSMENT APPEAL CHECKLIST
The key to protecting your interest from the tax man is to do your homework and document your case properly! Follow these steps and check each one off when you have completed it.
Read your assessment notice carefully. Compare your assessment to the previous year. Does your new assessment seem fair?
If you think your assessment is unfair, consult this report for information on how the tax system works in your province and your municipality. Please note the important information deadlines for filing an appeal.
Familiarize yourself with the tax terms in the glossary at the end of this report. Knowing the language will help when you talk to an assessment officer.
Visit the assessment authority and review all public records on your property (deed, title, roll and field report cards). Many offices will have a helpful assessment answer book that tells how the process works in your province. Take a few moments to read their suggestions.
Obtain the facts on the actual sale price of properties like yours:
- Listings of all properties similar to yours that sold in your area recently. If only a few were sold, go back further in time. (Ask assessment staff to explain the resources available to you).
- Contact Steve Klassen at 604-534-3008.
Review how the tax assessor has described your own property record. Note any blatant inaccuracies. Have they made errors in measuring the size of your lot, or the square footage of living space (or non-living space) in your home? Have they erred in describing any of the features of the property itself? For example, have they said there are two fireplaces when there is only one?
Write a letter clearly outlining the inaccuracies you discovered. All appeals must be in writing.
Most provinces require property owners to fill out an appeal form as well. The name of the form will vary. For example, in one Province it is called a Prescribed Letter Of Agency Form.
Remember to pick up information on any tax relief programs and any available exemptions or reductions (eg. low income families, widows, war veterans, properties with solar panels, etc...).
Be prepared to substantiate your claims with proof of property size and, if possible, provide pictures.
Remember, you have to prove that your home has been given too high of an assessment relative to other properties like it. If possible, find several comparable homes that have sold recently in your area and determine their selling price.
Finish assembling your case. Gather copies of all the supporting documents you will need. For example: a copy of your latest tax assessment notice, a copy of your deed to the property, a copy of the real estate bill of sale if you purchased your home recently (this is proof of its market value). Call the Assessor's office and ask for a copy of the record that the Assessor filled out describing your property.
Mail your letter to the correct address for appeals WITHIN THE TIME ALLOWED. (Consult the information sheet for your province).
- Make an appointment with your area assessor to discuss the letter. Ask the assessor what factors he or she takes into account when making an appraisal.
Remember, many factors, if brought to an appraiser's attention, could lower your property assessment. Market forces play a direct role in property values, including:
Unfavourable zoning changes near or around your home.
Lack of services or amenities (garbage collection, street lights, etc...).
Environmental problems (poor air or water quality).
Additional factors in and around your home also may win an abatement or reduced assessment. For example:
You may live next door to a property whose landscaping offends most people's sensibilities.
There may be "quality of life" factors near your property (eg. a motorcycle gang just moved in next door).
You may have a poorly designed floor plan.
Your insulation may be inadequate.
You may lack sufficient storage area.
Your plumbing or heating system may be inadequate.
Unless the assessor has actually visited your property (and often they do not), he or she has no way of knowing about these facts unless you speak up. Many assessors are reasonable people; sometimes explaining the facts will encourage them to re-assess the property (although usually you must file a written appeal to ensure that this happens). Assessors deal in appearances and averages. If your home has received too high an assessment, it may be because the assessor is unaware of something about the home, or the neighbourhood that lowers the real value. You must identify what that "something" is, and bring it to the attention of the tax assessment office.
In most provinces, if you meet with the appraiser and continue to disagree with the assessment, you may file another appeal with a higher authority. The assessor will advise you of the next steps. When appealing the second time, be sure to limit comments and correspondence strictly to assessment matters, clearly outlining your argument and supporting evidence for the appeal. (At this level, ground for appeal must be improper classification, exemption and inaccurate data on comparable properties sold recently).
And Remember: When in doubt, ask Steve Klassen for information or advice. He'll do everything he can to help, and of course there's no obligation.
There are a number of good references you can consult for additional information. Start with your assessment office. Often they will have pamphlets or guides for the taxpayer.