What increase will we see on the city tax bill?

In 2009 we started to see the impact of the phase-in of the 2008 MPAC property assessment notice (which had overall assessments in Ward 33 going up in the mid 20 percent rate range). It appears that for many, maybe most in Ward 33 the increase in the city tax bill is higher than the city average.

Under Current Value Assessment, we expect our property taxes to rise if our property increases are over the averages and they have been for many or most houses in our ward.

The 2010 city budget under consideration has a 4% increase in the total residential tax. This is the same rate of increase as last year. In dollars, the 2010 residential increase will bring in about $87 million more.

We are left to ponder what would have been the situation for 2010 if the city had not had an unanticipated $210 million surplus from 2009! Would the increase be deep in double digits?

While the city tax rate went down in 2009 (from .61% to .60% or 1.33%) the assessment values increases in Ward 33 went up more than the city average of 5.39%. Many residential properties likely saw assessment rates increasing over 7%. The combined net effect for many households in our ward would be a city tax component increase in the 6% area_ 50% more than the city average of 4%!

The education component set by the province had a tax rate decrease of 4.55% that still resulted in the provincial take increasing by about 2.6%. (The combined tax rate was about .85%)

In 2010 we can likely predict that our household increases will be similar in percentage changes to 2009. That is, the total tax bill (city + education) will likely be in the range 5 to 6.5% depending if the province sets a lower education rate.

However, with the province reducing the education tax load (as well as corporate income tax rates) on businesses across the province, in times of deficits we should be expecting the province to take us closer to 6.5% total increase.

If the combined tax rate stays constant to 2012, many residential household (single family houses) will see a 2007-2012 increase of over 30%!

That is, under a storyline that was fortuitous for 2009-2010 we are likely going to see increases in our city tax bill that will make retaining your home more difficult (fixed to low increases in family income) to giving up on somethings. They could be worse. They unlikely will be better. The middle class squeeze remains.