Q. HOW IS YOUR PROPERTY VALUE DETERMINED ?
Assessors do not create actual value. Buyers and sellers in the market create value through their transactions. The assessor analyses the market to determine value. Your assessment notice should reflect a realistic price that you could have reasonably expected to receive, if you had sold your property on or about the base date in an arms-length open market transaction, given reasonable exposure in the marketplace.
The instruction given to the assessor under the Assessment Act is to assess at actual value and to consider the assessment of similar properties to ensure assessments are done uniform manner.
Market Value is the most probable price, not the highest, lowest or average price. It implies a reasonable time to be exposed to the market place, implies that both the buyer and the seller are informed of the uses to which the property may be put, assumes an arms-length transaction in the open market, assumes a willing buyer and willing seller with no advantage being taken by either party and recognizes both the present use and potential use of the property.
Uniformity implies that the assessor, using standardized, acceptable assessment procedures and practices, will consider all properties within the same jurisdiction similar to the one being assessed. The value should then be similar to those other properties.
Base Date is the date of valuation under the Assessment Act. For the 2010 assessment the base date is January 2008. This means that all assessed values are set at their market value as of Jaunuary 2008.
The Municipal Assessment Agency has an extensive data base on over 180,000 properties including physical details, sale information and financial information which is updated and broadened on a continual basis. Agency assessors collect data from a number of sources. Assessors conducting assessments will update the information on record. All other sources of data concerning properties in the community are investigated and pertinent information is gathered. Sources include the registry of deeds, real estate companies, surveyors, property owners and so on. On site inspections are conducted on an as needed basis.
Q. HOW DOES ASSESSMENT RELATE TO MUNICIPAL TAXES?
The assessor's role is to determine the fair actual value of the properties in a municipality. Assessment is used to determine your share of taxes. The Council's role is to determine the amount of taxes required to operate, set the tax rate, calculate and send out the tax bills and collect the taxes. Each year, Council, during its budgetary process, approves the amount of revenue required to operate the municipality. From this amount they subtract the known revenues, such as grants, licences, permits and so on. The remainder represents the amount of money to be raised by property taxes.
The tax rate is a relationship between the amount of taxes to be raised and the tax base. The tax rate is calculated by dividing the tax base (total taxable value) into the amount of tax that must be raised. For example, if total assessed value is $ 100 million, and the amount of tax to be raised is $ 1 million, the tax rate is 1 percent or 10 mills.
FORMULA
The word mill is derived from the Latin word for one thousand. In tax terms, one mill is equal to 1/1000 of a dollar or one dollar ($1.00) in tax for every one thousand dollars ($1,000) of assessed value.
Q. WHAT IF ASSESSMENTS GO UP OR DOWN?
As the market changes and reassessments are completed assessed values tend to shift up and down. A shift in assessed values may not mean a general tax increase within the municipality. Following the example from above, if total assessed value doubles, and the amount of tax raised stays at $ 1 million, the tax rate drops to 0.5 percent or 5 mills. In this case, if your property has increased in value, your tax may remain the same. However, if assessed value doubles to $ 200 million and the tax rate stays at 1 percent, the amount to be collected in taxes doubles to $ 2 million. In this case, if your property has increased in value, you will probably pay more tax.
