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Monday October the 14th, 2019 
Linda E. Sully
Broker, SRES

Johnston & Daniel, A Division of Royal LePage R.E.S. Ltd.
Brokerage

Rising House Values Could Hurt Wallets

Rising home values could hurt wallets

RENATA D’ALIESIO

The Globe and Mail

Published Wednesday, Sep. 26 2012, 3:55 AM EDT

Last updated Wednesday, Sep. 26 2012, 4:02 AM EDT

 

After a bruising recession temporarily dragged down real-estate prices in Ontario, homeowners have seen the assessed value of their homes jump 18 per cent on average since 2008 – the first increase to assessed values in four years and one that could mean higher property taxes for some Ontarians.

The increases in residential property values, determined by the Ontario Municipal Property Assessment Corp., vary widely across the province, from about nil in the beleaguered manufacturing belt of Windsor to 20 to 30 per cent in the Greater Toronto Area, Ottawa and Northern Ontario, which has experienced a resurgence in mining.

“It’s basically stable or increasing all through Ontario. That’s positive,” said Larry Hummel, chief assessor for the Municipal Property Assessment Corp. (MPAC), which released an assessment update Tuesday.

But the rise in property values will mean higher property taxes for some homeowners, further squeezing their finances at a time when record-low interest rates could start rising, the real estate market has shown signs of cooling, and Canadians are grappling with record debt loads, at 152 per cent of their income.

How much higher property taxes will climb won’t be known until the spring, when municipalities begin poring over their budgets and the new property assessments. The last time properties were assessed was in 2008, when a two-year government freeze on tax assessments was lifted.

The revised values are based on what a property would have sold for on Jan. 1, 2012. Increases will be spread evenly over four years. If a home’s value has risen more than the average in a community or region, that owner’s share of the overall property taxes will likely increase.

For instance, in York Region, north of Toronto, property values soared between 32 per cent in Markham compared with 19 per cent in King and 14 per cent in Georgina. (The average increase in York Region is 27 per cent.)

Overall, though, property values have not risen as rapidly as they did in the last assessment period, when they jumped an average of 20 per cent from 2005 to 2008, Mr. Hummel noted.

Waterfront properties in particular have not experienced the same surge in prices, rising only 12 per cent since 2008. Mr. Hummel points to several factors for the slowdown, including significant declines in water levels along some stretches of Georgian Bay and the Great Lakes and the lingering economic downturn in parts of Canada and the United States.

“American buyers have largely left the marketplace because of the high Canadian dollar,” he said.

The cost of farmland, on the other hand, has soared, in part because of growing urban development, increased ethanol production, and droughts in the U.S., which have strained supplies of corn and grain and sent commodity prices soaring. In turn, the value of Ontario farm properties has increased an average of 34 per cent, prompting the Ontario Federation of Agriculture to recently issue a warning to farmers: Many may not like what they see, come property-tax time.

MPAC, which is funded and operated by the province’s municipalities, has begun mailing out assessment notices to Ontario’s nearly five million property owners. The assessments should be in all homeowners’ hands by the end of November.

In the Toronto region, a property-tax hike could further strain affordability in what is already a high-priced real estate market. Some property hunters may have to shift their search to neighbourhoods and cities farther afield.

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Linda E. Sully
Broker, SRES

Johnston & Daniel, A Division of Royal LePage R.E.S. Ltd.
Brokerage

477 MT. PLEASANT ROAD , Toronto, Ontario M4S 2L9
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