Wednesday, December 14, 2016
Ontario needs to give homeowners the same protection from property tax hikes that tenants get from rent hikes
Next to Vancouver, Toronto's real estate market is the most expensive in Canada and one of the hottest markets in the world. The cost of living is skyrocketing in Ontario's capitol and it's at the point that a person has to make a considerable income just to get by comfortably there.
Toronto's politicians have been claiming that they've been keeping property tax increases at or around the level of inflation. Like most things politicians tell the public, that claim is a distortion of the truth. The tax rate on the value of a property may only be going up by a couple of percentage points every year in Toronto, but the amount the average taxpayer has to fork over to the municipal government in property taxes is going up by ten per cent of more per year for many homeowners.
The reason for that is Market Value Assessments.
The average detached Toronto home is worth over a million dollars, more than twice what is was ten years ago. So if you live in Toronto and bought your home for $500,000 in 2006, you're now probably paying the tax rate for a million dollar home. That regardless of whether you're a senior citizen on a fixed income, or if you lost your job, or if you're income has only gone up by a fraction of the percentage of your tax rate increase.
Basically, you're getting screwed over by incompetent Toronto politicians who refuse to rein in their exorbitant spending. They dole out grant money to their activist friends in the guise of arts funding, they go on expensive junkets and enjoy massive perks, they mismanage the city's budget, and they stick homeowners with the bill.
It's a disadvantage that homeowners have compared to tenants. The Ontario Residential Tenancies Act sets annual guidelines for rent increases, typically in the 2% range, and landlords have to get special dispensations to raise the rent above that rate. Whereas the average downtown Toronto homeowner has seen their property tax bill go up by about 100% in the last five years due to the huge increase in property values and the Market Value Assessment.
When Toronto's municipal politicians say they love poor people, the must mean it, because they've set about to make as many people poor as they possibly can.
When a tenant occupies an apartment in Ontario, the landlord is bound by the provincial guideline rent increase. When the tenant moves out, the landlord can increase the rent to whatever he likes and the market decides if he gets it. Homeowners need similar protections from incompetent municipal politicians who act like abusive landlords. Property taxes should be based on the value of a house when it was purchased. Increases should be a percentage of the tax rate of that assessment. When a house is sold, then the new tax rate should be based on the purchase price, instead of penalizing Torontonians for living in a city with an upswing in real estate prices.
That would also afford some protection to the city's coffers. If the market were to take a sudden dive, as it has at times in the past, a reevaluation could halve the city's property tax revenues.
It's time for the Provincial government to step in a put a moratorium on Market Value Assessments. Because otherwise, it's going to exacerbate the divide between rich and poor in Toronto and make a city will be "world class" only in its problems and inequity.