The Town of Parry Sound has asked for comments to a proposed by-law creating a new property class for the purpose of setting tax rates. Here is my read and take on the proposal.
A couple of weeks ago in one of my council meeting previews I discussed the issue of property assessments, levies and tax rates that caused me to post a revision as I had improperly used the terms tax rates and levy. You might want to read that revised post for background.
This draft by-law intends to amend By-law 2006-4898 that created a new property class for the purpose of taxation. It seems to apply to affordable housing properties that offer housing at below market rates. In the original by-law this type of property class only applied to twenty units at the old hospital redevelopment complex.
By-law 2006-4898 created a New Multi-Residential Property Tax Class and set the tax rate as the same as the standard Residential Class rate. In terms of tax rates the Residential ratio is set as 1.00, and other properties, for example, Commercial, Industrial, Multi-Residential, are set as a ratio of this 1.00. The 2016 ratio for Commercial is 1.664617, which means these properties are taxed at 1.66 times that of a Residential property for the same assessment value. In general, almost all tax rates on properties in Parry Sound are higher than the Residential rate, exceptions are Pipelines, Farmlands and Managed Forest property. And of course there is the railway infrastructure, rail lines and trestles worth millions of dollars, that is not taxed at all.
The current Multi-Residential tax ratio is 1.514485, so people in those properties,
I imagine this includes Silver Birch and Granite Harbour and other properties, pay about 1.5 times the Residential Rate on the assessed value of their units. (Correction – this does not apply to units in Silver Birch or Granite Harbour as they are individually owned and subject to the standard 1.00 ratio!) This why a New Multi-Residential property class was established in 2006 for the twenty old hospital units. Setting the New Multi-Residential rate the same as the Residential rate rather than the Multi-Residential rate offered the developers a savings of about one-third in taxes. This was a benefit that was to run for 20 years, or until 2026 in the case of the old hospital units.
So the intent now is to extend or perhaps expand this New Multi-Residential Class to the housing being built on Gibson Street in the old William Beatty School. The By-law uses the language “qualifying affordable housing units”. I have no issue with the change, but if you do please send your comments to the Town of Parry Sound, attention Trevor Pinn.
An aside regarding tax rates and the levy. With the reassessment of properties, the Town will need to reset tax rates for the different property classes. The levy is simple; I imagine it will go up one or two or three percent this year. But the MPAC reassessment of all properties has increased the property values of Multi-Residential properties, lowered Residential a little and lowered Commercial considerably. If the tax ratios from 2016 were applied to the 2017 tax year it is likely that Commercial properties would see a drop in their taxes, Residential might see a slight increase, and Multi-Unit Residential would receive a more than small increase, at least over the next four years. Interestingly, drops in assessed value are applied immediately, while increases in assessed value are phased in over four years. Let’s see how the Town handles the 2017 tax ratios. Because tax ratios are applied only to classes of properties and assessments are made on individual properties, there are sure to be some inconsistencies. Check your assessment now, and tax bill when it arrives next year, to see if you have been unfairly treated. I understand that appeals to assessments can only be made in a limited window of time, so review your assessment now, and be prepared to appeal the decision should you feel it is out of line with your neighbours. Making an appeal after the window has closed is tough, if not impossible, until the next four-year reassessment is conducted. And that is in four years.
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