Today, Randy Hillier, leadership hopeful of the Ontario PC Party, got it wrong when he vowed to kill MPAC, the Municipal Property Assessement Corporation. While the idea sounds good, the true enemy is Market Value Assessement (MVA) and the role it plays in your annual property tax bill.
MPAC sets the value of Ontario properties which is then used to calculate your property tax. A more democratic solution would have been to remove MVA altogether.
The idea that your home's value should affect the tax a municipality can collect on your home is a license to raise taxes. If we're going to charge property tax then it should be calculated strictly on the square footage of your property and applied equally accross the board. That is the only fair way to do it. I can understand collecting different rates between commercial and residential properties, but there is great injustice done with the way things are now.
It also deflects responsibility for taxes. For example, under the current regime, if you have a problem with your property tax, who do you go to? The town will blame MPAC. MPAC will then say their assessements are only a component of the tax calculation. In other words, the ratepayers, citizens, etc. cannot properly hold anyone responsible for soaring or unfair tax rates.
This is not good for democracy. Who do you hold accountable at ballot time? The provincial government? The Municipal? The Regional? It makes me wonder whether this was the true intent in the first place.
Charging tax rates on market value also penalizes anyone who tries to make their homes a better place, or increase its value for resale, and it rewards those who let their properties fall into disrepair.
The traditional justification for MVA was that it allowed towns and cities to increase revenues in order to meet ever increasing obligations. But that's the problem isn't it? There's no incentive to reduce obligations to match revenues, it's alwasy to increase revenues, therefore giving towns more money to spend.
Hillier's policy is only a half measure. It doesn't go far enough at all. Instead of blaming MPAC for soaring, inequitable and unfair assessements, we can now blame municipalities. Big deal. Taxpayers will still be in the rotten position they are in today.
While MPAC came under the scrutiny of Andre Marin and the press back in 2006, under Hillier's policy, no such champion for the taxpayers will exist.
Hillier's policy may sound good in a headline, but think about it for a second, and you realize it has the potential to be worse.
6 comments:
At least it is a half measure. It would eliminate the bureaucracy.
Complete reform of all taxes is obviously the best way to go.
What are the other POLITICIANS saying about ANY tax reform??
BillM,
I question whether or not this would eliminate the bureaucracy. If this policy were to be implemented the municipalities would then be responsible for the assessements on properties. Who do you think they will look to for help?
You are right to ask what other politicians are saying about any tax reform. So far, Hillier seems to be the only one with policy announcements.
I agree that municipalities should learn to live within their means. Just because I add an in-ground pool to my backyard doesn't mean that the city will incur extra costs as a result. My water and sewage bill will increase but that should be all that increases.
We live in a home built in 1947 and until fifteen years ago it was the last house on a dead-end street with a farmers field beyond.
Then a developer moved in and suddenly our dead-end street became a through street with brand new homes as neighbours.
When we first had our house assessed by MPAC we were astonished to find that it had apparently increased in value to the tune of $100,00 virtually overnight. The problem was that MPAC uses comparable properties in the same neighbourhood to determine value and all of these new homes selling for $235,00 suddenly brought our little $135,000 home up to their 'value' and our tax bill went up accordingly. I was able to get them to see the error of their ways but they do the same thing every time the do a fresh Market Value Assessment.
NeilD
NeilD has hit the nail on the head - if the value on your property goes up, it does not mean the cost of plowing your road goes up. If your property evaluation goes up 50% and the cost of maintaining the municipality is unchanged, then your tax rate should drop 50%. barry6173
I'm sure that Hillier's idea is just a stepping stone to revamping the property assesment process. The only problem is that municipalities will just find another way to steal your money.
TrueBlue,
Yes, the towns will ALWAYS find new ways to get more money. Especially those cities whose names begin with Toronto.
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