Sunday, November 4, 2012

Current Value Assessments Demystified

  By now, most of you that own property in Ontario will have received your Property Assessment Notice from the Municipal Property Assessment Corporation (MPAC). The value of your property as outlined in this Assessment Notice will be the basis for your property taxes for the years 2013 through 2016. I have received calls from several clients asking questions with respect to this notice and what it means. In my next couple of postings I will endeavour to shed some light on the assessment process here in Ontario and what it means to those of us that own property throughout the Province.

  Property taxes are obviously a huge source of revenue for both the Province as well as for the municipalities throughout Ontario. How huge? According to MPAC, the total assessment base or value of the almost 5 million properties in the province is $1.81 trillion. As a not-for-profit corporation which is funded by Ontario’s 444 municipalities, MPAC has a number of responsibilities some of which are as follows:

- Assignment of property classes ie: residential, commercial, industrial, farm etc. etc.

- Classification of properties based on their use.

- School support lists.

- Formulation of provincial jury lists.

- Preparation of municipal and school board voters lists.
and lastly the most significant one to us as property owners…..
- Assigning a Current Value Assessment (CVA) to all properties across the province. Current Value are subsequently used by municipalities in conjunction with their respective tax multipliers to arrive at the final property taxes that we pay on our respective holdings.
  What is a Current Value Assessment? The definition of “current value” as provided by MPAC states “in relation to land, the amount of money the fee simple, if unencumbered, would realize if sold at arm’s length by a willing seller to a willing buyer.” In layman’s terms and or in everyday real estate transactions, “current value” is the most probable selling price that a property would sell for in an open and competitive market.
Relative to the property taxes we pay, how is the “current value” different from the “sale price” a buyer paid? A sale price is what a seller and buyer agree to for a specific transaction at a given point in time. MPAC establishes “current value” not based on what a buyer paid for their home but by establishing a median sale price for the property derived from a range of similar market sales in an area.

  Current values are established based on a four year cycle and in my next posting I will review how this value is applied to your property for taxation purposes. In the meantime, if you have any questions with respect to the above please do not hesitate to Contact Me.

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Royal LePAGE Locations North (Brokerage)

330 First Street, Collingwood, ON L9Y 1B4



Email:
rickcrouch@propertycollingwood.com



Direct: 705-443-1037



Office: 705-445-5520 ext 230




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Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.