taxes that is, especially for those of you who owns a condo.
For condo owners it’s a case of good news and bad news. The good news is that the value of your property as assessed by MPAC (Municipal Property Assessment Corporation) has increased substantially over the past four years. The bad news is that almost all other properties in Parry Sound have decreased in their assessed values, meaning more of the tax burden is being shifted to condos.
For residential property owners the news is not so good, and not so bad. Property values on average have dropped, and taxes are going up, but not as much as for condo owners.
For business property owners (Commercial) the news is not so good, and good. The not so good is that the assessed values for business properties have in general dropped significantly, translating into a lower average tax increase. The big box stores who appealed their assessments at the provincial level have seen their local property values drop significantly. For businesses the drop in property assessment values really is good news in that it stabilizes property taxes in a tax increasing environment. Since business sale prices are based on revenue and profit, not property assessment values, the reduction in commercial assessments actually improves the bottom line, and eventual sale prices.
For the Town of Parry Sound the news is not so good; overall assessments are down and unless expenses can be trimmed the burden of taxes needs to be shifted.
For condo owners there is a bit more news, good and bad. Increases in assessed value on properties are phased in over four years, not in the first year. That means if your property was previously assessed at $100,000 and the reassessed value was $200,000 (you wish, but it makes for simpler numbers), your assessed property value for tax purposes would rise to $125,000 in the first year, $150,000 in the second, $175,000 in the third and $200,000 in the fourth. Because of this provision it means your property values, and taxes don’t go up by the full reassessed value of $200,000 in the first year. The bad news is that your property taxes will increase in each of the next four years because of the increased assessed value of your condo, in addition to the Town’s annual spending increase.
How does this all translate in terms of tax increases for 2017 in Parry Sound? The table below if taken from the Staff presentation to Parry Sound Council December 13, 2016. The figures are based on the current budget as proposed by Staff. It’s possible that these figures could go up, or down, by 1% depending on decisions still to be made by Council.
I have been laisez faire with respect to Parry Sound budgets for the past few years, figuring the new expenses were related to necessary items and services. I feel that if you need new snow tires for your car you probably want to buy them before you have an accident that will cost even more, even it requires a loan. But, do you need to take out a loan for that week in Cuba or Costa Rica, or a new snow machine, or ATV? There is need to spend, and nice to spend. Based on budget meetings to date I’m not sure that Council is paying attention to the difference. At the last meeting of Council a new ’music garden’ park was approved, and I really don’t get it. Yes, it is a nice to have, and yes, much of it was in the reserves, but what about next year if/when one of the existing parks needs some significant repair or it needs an upgrade? As a municipality have we sufficiently satisfied our needs that we can afford to be looking at 2%, 7% and 13% tax increases to support nice to have budget items?
Parry Sound is figuratively taking a pay cut in 2017 because of the MPAC reassessment. Actually it really isn’t a pay cut, it’s a redistribution of who is carrying a larger or lesser portion of the overall tax burden. Condo owners are taking on more, and business owner’s are taking on less. It’s likely that condo owners who are facing an average 13% tax increase in 2017 could be facing 50% higher taxes in four years than they were in 2016 by the time all four years of the reassessed condo value has hit their taxes. Ouch!
I don’t own a condo, and I don’t necessarily think they should be given a ‘break’. Their properties have increased in value and that means they should pay more. I pay more in taxes than some of my neighbours because I have a higher assessed property, and that seems fair. I do think that Council needs to pay attention to what is necessary and what is nice in the budget. Over the past few years they have been remarkably ‘generous’ in their approval of expenses that are more nice to have than need to have. I labeled the 2016 Parry Sound Budget the ‘pickle ball budget’ because budget was allocated to organize pickle ball play, among other recreational activities. I’m not sure that we saw any pickle balling, but it was one of the many reasons for last year’s tax increase. Is pickle ball, or any number of other items in the 2017 Budget, something we need, or are they things we want? Do we even want these nice to have items?
Is anybody else paying attention to the Parry Sound budget? Council is made up of good people who want to do the right thing, and not feel as though they are a Grinch stealing joy from the residents by cutting services or rejecting new initiatives. They need your input to understand what you feel is need to have and what is nice to have. Here are links to the various budget documents. At least look at the Capital Budget Overview and Tax Impact Presentation (December 13th) to get a short overview of where the 2017 Budget stands at this point and how it impacts your property taxes.
Note: not all condo owners will see the full 12.98% increase in 2017 because their condo assessment might not have risen as high as the average. Others may see an even higher increase if their property assessment increase was above the average. That will be the case for all property owners, you are seeing the average impact, not necessarily how the 2017 increase will impact you.
The Path Less Chosen. A bit more demanding but more rewarding.