Property Tax Assessment

Assessing a property’s value for the purpose of calculating property tax is a complicated process involving many variables (and a lot of math). Fortunately, the Municipal Property Assessment Corporation (MPAC) has recently made some changes that can help homeowners gain a better understanding of how their property is assessed – and what that means for their tax bill.

A three-year freeze on property assessments ended on January 1 of this year, and MPAC staff is currently engaged in reassessing every property in Ontario. New assessments will be mailed to property owners in September, and will be effective for the 2009 through 2012 tax years. >From now on, property values will be reassessed regularly every four years.

Assessments are intended to determine the “current value” of each property. Current value means the price a property might reasonably be expected to sell for, in its current condition, on the open market. The newly-redesigned MPAC web site (www.mpac.ca) contains a wealth of information about how properties are evaluated. According to MPAC, the 5 major factors that account for about 85 per cent of the value of any residential property are:

• Age of the house
• Building area
• Location
• Lot dimensions
• Quality of Construction

Other features that may affect value include number of bathrooms, fireplaces, garages, pools, and whether the property has water frontage. All these features are analyzed with sales of comparable properties in the community to determine the current value assessment.That number is used by the City of Ottawa to calculate the owner’s property tax bills for the next 4 years. (If a property increases in value, the increase will be phased in over the 4 years; if it decreases, the entire decrease will come into effect immediately.) The city multiplies a home’s assessed value by the tax rates for each of the municipal and education portions of the bill, and adds the two numbers together to determine the amount an owner pays.

A section of MPAC’s web site called “About My Property” allows any property owner to review their assessment, along with those of up to twelve other properties of their choice, to compare assessment information for similar properties and help determine whether their property's assessed value is accurate.

What if an owner feels that his or her assessment is inaccurate? A brochure sent out with all assessment notices includes information about how to report inaccuracies and file a complaint or challenge. A page on MPAC’s web site called “Resolving Assessment Concerns” offers a direct link to the Request for Reconsideration form, as well as details on how an appeal to the Assessment Review Board (ARB) can be made.

In the case of an appeal, a REALTOR® member of the Ottawa Real Estate Board may be able to provide some assistance; as with any professional advice, there may be a cost for this service. Anyone, including a REALTOR®, may be called by an appellant to provide evidence at an ARB hearing. Whether they will be considered to have sufficient expertise to offer opinion evidence as an expert is up to the ARB.



The President's Pen column was prepared by the Ottawa Real Estate Board and first appeared in the (date) issue of the EMC community newspapers.

ONTARIO EXPANDS LAND TRANSFER TAX REFUND PROGRAM
First-time buyers of resale homes to benefit from new tax measure

TORONTO – The McGuinty government is giving all first-time homebuyers a break on land transfer tax by proposing to expand the Land Transfer Tax Refund Program to include purchases of resale homes, Finance Minister Dwight Duncan announced today.

“Expanding this Land Transfer Tax refund is an important part of our government’s commitment to helping Ontarians buying their first home,” Duncan said.

Effective midnight tonight, first-time buyers of resale homes, as well as newly constructed homes, would be eligible for a refund from the provincial government of up to $2,000 of the Land Transfer Tax paid.

The expanded Land Transfer Tax Refund Program for First-time Homebuyers is part of a package of new tax initiatives announced in the 2007 Fall Economic Outlook and Fiscal Review that would provide $1.4 billion in provincial tax relief for business and people over three years.  The government is making strategic investments in people, communities and infrastructure to strengthen Ontario’s economic advantage and help manufacturers and other sectors challenged by current economic conditions.    

                        

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Privacy and the Real Estate Transaction

These days, the security of personal information is big news. Nearly every week there’s another story in the media about protecting our identification and making sure not to give out too much personal data. So when you enter into a relationship with a REALTOR®, and he or she requests personal information from you – name, address, banking information, e-mail addresses and phone numbers, and so forth – you should know that your information is being handled with the utmost care. It’s taken so seriously, in fact, that the Canadian Real Estate Association (CREA) has its own Privacy Code, in addition to adhering to the federal Personal Information Protection and Electronic Documents Act (PIPEDA). CREA’s Privacy Code states that a REALTOR® will: ·                     Obtain your consent when they collect, use or disclose your personal information; ·                     Only use the information for the purposes they have discussed with you; ·                     Allow you to have access to your information; and ·                     Have privacy policies that are clear and understandable. The personal information that your REALTOR® collects from you is used to facilitate the real estate transaction, particularly in marketing your house when you are selling. In order to effectively advertise your house in various media, including newspapers and web sites, and in providing other salespersons and their prospective buyers with information about your home, some disclosure of personal information is necessary. This does not generally include your e-mail address or phone number, though your name and the name of any co-owners of the home will appear on your MLS® listing, viewable by other REALTORS® and anyone authorized to use the MLS® system, such as appraisers, but not by the general public. Once your home is sold, the sellers’ names are removed from the listing, though the listing itself will remain in the database as historical data, which is essential to the operation of the MLS® system. The purchase price will be recorded on the listing file. The real estate firm that you worked with will keep your name and other information in their company’s files. By agreeing to list your home on the MLS® system, you are agreeing to allow the ongoing use of listing and sales information about your home. If you purchase a home listed on the MLS® system, your name will not appear on the listing; only the name of the REALTOR® you worked with and their firm’s identification code appears. Generally speaking, most of the personal information that your REALTOR® collects about you will be obtained directly from you; however, they may also obtain information from other sources such as credit bureaus and government agencies as necessary. You will always be informed that this information is being collected and what purpose it will be used for; your REALTOR® must obtain your consent to do so. In any event, you can rest assured that your REALTOR® will never ask you for any information that is not essential to the marketing, sale or purchase of your home, and that he or she will not share that information with anyone who doesn’t have a direct interest in helping to accomplish those goals.