If your house is now valued at a million dollars, but currently assessed at 300,000, does that mean you're suddenly going to have to pay three times as much in property taxes?
Happily, no.
I thought maybe the person who wrote me isn't the only one with this specific concern, so here's what I wrote back (and I checked it with the Treasurer, so it's legit):
I can guarantee you, you’re not going to have a doubled tax bill if
your house is suddenly worth twice as much. Property taxes work very differently
than sales tax or income tax.
Here’s how Collingwood’s budget process worked the last two years
that I’ve been on Council: The Treasurer and other staff come to council
with a rough number of how many dollars the town needs if we’re going
to continue offering all the services we currently
have. Then, we councillors send the staff away with another rough number: what we’re willing to accept as an increase or decrease in spending.
After that, staff return with a proposed budget, which incorporates
Council’s number and any new or additional services
the council has told them the town needs or wants. We debate and
discuss, cut some stuff, keep some other stuff and then, that’s the
budget, and the tax rate flows from there.
Last year, the final number of dollars needed came to around 30
million raised from property taxes. Here’s the important part: The
approximately 30-million is then collected from among all the taxpayers,
based proportionally on their MPAC
assessment.
(Just fyi, the town’s whole budget is actually about 100-million
dollars, but the rest comes from other sources, like the feds and
province and interest and fees and Development Charges.)
(To add another complication, the town collects your taxes on
behalf of the County and the School Board, so, if your tax bill is 5,000 dollars, only about 2900 comes to the town. The County and the School Board
set their own taxation rate, which the town has
no say in. This year, the County has set a target of 2% for its
increase. The school board is likely to have a small decrease. (I may
have already heard what was in their budget, but I can’t remember
offhand…))
Collingwood taxpayers have seen lower than cost-of-living property
tax increases the last several years (about 1%), because of how many new
people are moving here. The Treasurer can’t know exactly how many new
properties will start getting tax bills each
year, because of delays in construction etc., but the Treasurer does
come up with an estimate, with help from the building and planning
departments, and includes that estimate in the total number of dollars
to be collected. Some years, the estimates are a might
bit conservative, and we end up with a surplus that we put, by policy,
into reserves. Some people don’t like this policy.
Wow, that was a really long answer to your question, which was,
‘has there been any thought put into this?’, and the shorter answer is a
definite, ‘yes’. Lots of thought, for sure. You can rest assured your
property taxes will not double even if your
house price doubles, because everyone else’s house price is also going
up, and the property taxes are based on the town’s needs, divided among
all the taxpayers, proportionate to the value of their property.
So, if you, like me, are planning to leave your house 'feet first', I hope this clarification helps ease your mind a little. Oh, and a further clarification: the town does actually have a say in the County's taxes since we send two people to County Council: the Mayor and Deputy Mayor and sometimes me, since I'm the alternate. Also, the Treasurer tells me MPAC offers input for the estimates of new homes in town, while tax policy advisors hired by the county additionally give the town's Treasurer input on the estimates.
