Tax Fighter Guide

 

The city of Winnipeg is required to reassess all property valuations every two years. This last week, the city of Winnipeg mailed you a “preview letter” of your home’s reassessment for 2018, based on your home’s assessed value as of April 1, 2016. 

 

There are a number of opportunities to discuss this assessment “preview” before your formal Property Assessment Notice arrives in June 2017. As a valued client, I’ve prepared for you a “Tax Fighter Guide” to help you understand your assessment in order for you to make an informed decision on whether or not to appeal your assessment, and maybe lowering your property taxes. 

 

Please don’t hesitate to contact me if you have any questions or need more information. If there is anyone else you know who would find this valuable, please let me know and I’ll be happy to send them the guide as well. 

 

For more information you can also visit http://winnipegassessment.com/AsmtTax/English/previewprogram/previewprogram.stm

 

The Tax Fighter Guide  For the Home Owner.   Are You Paying Your Fair Share Of Property Taxes?

Here Are Proven Tips To Ensure That!

How to Ensure That Your Property Taxes Are Fair

 

 

  • How your property taxes are calculated
  • How you can tell whether your assessment is fair or not
  • 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 concern 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 insure that your assessment (and the taxes that result from it) are fair in relation to all other taxpayers

 

 

 

How To Use This Kit

 

 

Read this booklet first.

It will give you a good understanding of how property taxes are levied, and a useful “checklist” or blueprint to follow should you decide to appeal your taxes.  Keep this booklet with you.  Use it to make notes and write down questions.

 

Now for the most important advice of all.

If anything isn’t clear, or you need some expert help, call your Real Estate Representative who gave you this kit.  Our people are well informed about how the property tax system works in your area.  They’ll be pleased to offer advice, at no cost and no obligation.

 

 

 

To the best of our knowledge, the information in this booklet is accurate.
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 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?

 

Getting answers isn’t easy.  In many parts of Canada the property tax system isn’t “user-friendly.”  Sometimes it’s hard to reach the right government official to get answers to your questions.  Sometimes the answers themselves are hard to understand.  Figuring out your choices, and your rights, can be frustrating and intimidating.

 

That’s where The Tax Fighter Guide For The HomeOwner is design to help

 

Its purposes is to guide you through the maze, give you plain answers, and tell you where you can go for more information if you still have questions.  So …. let’s get started.

 

The Property Tax: How It All Began

 

Property taxes have been around since the Roman Emperor Augustus brought in the first property tax almost 20 centuries ago.  Today property tax is the financial backbone of local government all over North America and is the source of most of the funds that pay for police, fire, local road and sewer, and other municipal services.  These services vary from community to community.

 

All of us should pay our fair share for these services.  The problem arises when the property tax is applied unfairly, causing some people to pay more than they should.

 

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 here is “thinks.”  In principle, it works quite simply:

 

  • Tax assessors calculates what they think is the fair market value of every property in the municipality.  The value of your property is calculated as of April 1st, two years prior.
  • 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 the assessment is too high, you have to produce evidence that shows the assessor made a mistake.  Later in this Guide, we’ll 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 $1,000 of assessment).
  • If your property is assessed at $100,000, then your property tax will be $100,000 times 20 mills per thousand dollars or value, or $2,000 per year.

 

 

How Do They Determine “Assessed Value”?

The actual value of buildings and land fluctuates and depends on many factors.  In order to estimate a value for tax purposes based upon the price they think your property would fetch if it were sold in the open market at a fair market price.

 

This doesn’t mean that the Assessor comes out each year and checks your house to see what he thinks it’s worth.  Instead, to try and stay current, assessors feed market information into a computer that compares similar properties and calculates a blanket appraisal by a certain date.  These mass appraisals are usually done by comparing information about your property to similar properties recently sold in your neighbourhood or town.

 

In addition to these “mass appraisals”, assessors get information about your property from other government departments.  For example, if you apply for a building permit to build a garage, the local government department forwards the details to the assessment authority, who include the value of your new garage when appraising your property’s value.

 

The exact time of year that properties are appraised varies from province to province, and from municipality to municipality

 

Important Point to Remember:

The process of “mass appraisals” is not an exact science.   The government makes mistakes, and these mistakes can unfairly increase your taxes.  The only way to be sure your assessment is fair is to check into the records.  We’ll show you how to do this.

 

Why Does The Assessed Value Of Your Property Change?

Rising or declining property values in your neighbourhood can have a major effect on your assessment, because assessors look at the sale price of properties like yours.  Another thing that can increase the assessed value of your property (even if neighbourhood property values haven’t changed) is renovations.  Renovations, not only to a home but also to other buildings like garages, barns and storage buildings, can make a property more valuable.  (In case you wondered normal residential maintenance – ego keeping the grass cut or planting a garden – doesn’t increase or decrease the market value significantly.)

Here’s what’s important to remember.  The assessed value of your property is a professional opinion based on the expertise of the appraiser and the accuracy of the information on file.  Just because an assessor says your property has increased in value doesn’t mean that it is so.  Assessment methods can lead to wrong conclusions.  (We give you some examples later on in this booklet).

 

 

If Your Assessment Goes Up, Must Your Taxes Go Up?

Not necessarily.  Let’s say the municipal government kept its spending flat this year. Let’s also assume that everyone in town received a higher property assessment (perhaps a new industry was opening nearby, and land prices went up).  In a case like this, no one’s taxes would rise, because the mill rate would drop by the same amount as the increase in the overall assessment.  In other words, the higher assessment would be cancelled out by a lower mill rate.

 

Unfortunately, in the real world it seldom works this way.  Most of the time, governments don’t hold the line on spending, they increase it.  So both the assessment and the mill rate rise.

The threat to your interests comes from the fact that your assessment may be unfair compared to other, similar taxpayers.  In that case, you’ll be charged a higher property tax than you deserve.  What you have to focus on is ensuring that your assessment is properly done and fair.  And that’s the goal of The Tax Fighter Guide For The HomeOwner.

 

What Can You Do If You Disagree With The Assessment Authority’s Calculation Of Your Property’s Value?

Every property owner has the right to review government records on his or her property and the right to question the assessed value.

Assessment authorities are public servants, and usually are willing to assist you in making sure your property is accurately and fairly assessed.  Before consulting the assessment authority, it’s best to have an understanding of how the process works.  Follow the steps outlined in the Assessment Appeal Checklist.

 

If You Have Discussed Your Assessment With The Local Assessment Office And Still Disagree With Their Evaluation, What Should You Do?

Merely believing that your taxes are too high is no basis for lowering an assessment value.  To successfully appeal an unfairly high assessment, you must present evidence that proves one or more errors in how the appraiser appraised your property.  If you have followed the Assessment Appeal Checklist, met with an assessor and still disagree with his/her opinion of value, you usually have the right to appeal to a higher authority that is independent of the assessment office.

One warning, Don’t expect your appeal to be heard quickly.  There could be lengthy backlogs of appeals already in the system.

 

What If I Appeal, And They Increase My Assessment?

There’s no guarantee and you have to take the chance.  However, the odds are good that it won’t happen.  According to a 1992 study 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
  • Farmers
  • Volunteer firefighters
  • War veterans, low income families, senior citizens or widows

Check with your local assessment office to see whether tax relief is available and whether you qualify for it.

 

ASSESSMENT APPEAL CHECKLIST

The key to protecting your interests from the tax man (or tax woman) is to do your homework and document your case properly!

  • 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 Guide for information on how the tax system works. Please note the important deadlines for filing an appeal.
  • Familiarize yourself with the tax terms in the glossary at the back of this booklet.  Knowing the language will help when you talk to an assessment office.
  • 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.  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).
  • 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 – eg. 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.)  This can only be represented by owner, lessee and/or interested third party.  The Compliant Step-By-Step Guide, can be accessed by:

 

 

  • The following information must be included about the property for which you are requesting a review:
    • The assessment roll number
    • Your reason for requesting a review
    • The property description (i.e. address)
    • Your full name
    • Your mailing address
    • Your home and business phone numbers
    • A statement clarifying whether or not you are the owner of the property in question
    • If you appoint an agent, the full name of the agent and the agent’s business phone number
  • Remember to pick up information on any tax relief programs and any available exemptions or reductions (e.g. Low incomes 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, classification of property
  • Remember, you have to prove that your home has been given too high 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
  • Your Sales Representative will advise you where to obtain the information on your assessment.  Or you can hire an independent real estate appraiser for a fee
  • 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 title 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.  Remember as of April 1st, two years prior.
  • Mail your letter to the correct address for appeals, WITHIN THE TIME ALLOWED postmarked deadline January 31 (year of assessment).
  • Fax number for local assessment office
  • In person: drop off at the address shown on the assessment office
  • On-line: complete the on-line appeals form at www.winnipegassessment.com
  • Make an appointment with your area assessor to discuss the letter.  If you can’t find the address, call your Agent’s Brokerage.  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
      (e.g. 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 cases, 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, grounds for appeal must be improper classification, exemptions and inaccurate data on comparable properties sold recently)
  • What happens after you request a review?
    • WPG Assessment may contact you to discuss your file
    • WPG Assessment may book an appointment to view your home
    • You will be notified of the date, time and location of your review hearing
  • What happens at a hearing of the property assessment review panel?
    • WPG Assessment will contact you to set your hearing date
    • Both you and WPG Assessment will be given an opportunity to provide evidence, and ask questions in regards to your complaint
    • If you are requesting a review concerning the value of your property, your evidence should include sales of similar properties as of April 1st, two years prior to support your estimate of value

 

 

Further Information

There are, as mentioned, a number of good references you can consult for additional information.  Start with your assessment office; often they will have pamphlets or guides for your taxpayer.

If you want an exhaustive source, we highly recommend a book by Lawrence J. Czaplyski and Vincent P. Czaplyski, called The Homeowner’s Property Tax Relief Kit – Everything you need to fight unfair assessments and slash your property taxes!  It’s published by McGraw Hill, Inc.  This book deals with American property taxes but when it comes to property taxes the two countries are similar and the book has some excellent ideas.

 

Glossary of Property Tax Terms

 

Abatement: A reduction in the assessed value of a property.

Appraisal: An assessor’s opinion of value of a property and its improvements. 

Assessment: The official valuation of property for taxation.

Assessment Notice: An annual notice mailed to property owners stating the assessed opinion of value for taxation purposes.  Assessors do not determine tax rates or collect property taxes.

Title: A legal description that conveys ownership of real property

Easement: The right to use, without ownership, a portion of an owner’s property

Field Card: A record filled out by many assessors.  Contains all relevant details about your property as viewed by an appraiser

Homeowner: Someone who enjoys the rights and privileges or property ownership and is subject to paying taxes on the assessed value of land and improvements

Improvements: Anything built or added to land to increase its value (garage, swimming pool, barn, etc.)

Mass Appraisal: Determining the value of specific properties by comparing similar properties in a specific area and appraising all land and improvements together

Mill: One-tenth of a cent, a term often used to express real estate tax rates.   Mill rates are usually expressed in dollars per $1,000 of assessed value

Property Tax: Your share of the total cost to provide community services and fund local government spending

Tax Authority: Regional Districts, hospitals and schools, and municipal and provincial governments set tax rates based on the total assessed land value.  Property taxes are collected from owners to pay for government services, debt, etc..

Tax Rates: A portion of the government’s operating budget divided according to each property owner’s total assessed value of land.  Tax rates are calculated using Market Value x Tax Rate = Property Tax

Tax Roll: An official list of all taxpayers in a jurisdiction, their assessed property values, and how much tax each owes

 

 

 

Alison O’Toole

Alison O’Toole

REALTOR®
CENTURY 21 Bachman & Associates
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