Questions about municipal assessment and property tax

The value of residential properties listed in the Metropolitan Montreal Municipal Valuation List will increase by an average of 30% to 40% with the next effective list in 2023, as indicated The press Thursday. Readers have expressed concern about the possible increase in their tax burden. The press answers their questions.

Posted at 7:00 am

Andre Dubuc

Andre Dubuc
The press

Why would my home’s value increase by 40% if I didn’t do anything?

The municipal register should reflect the market value of the properties on the reference date. For the next roll 2023-2024-2025 the reference date is the 1stah July 2021. If we are talking about a 30 to 40% increase in residential properties up to five units, that is an island-wide average. The exact appreciation of each property will not be known until September 14, when the listing is submitted. On that date, an owner can find out the exact increase applicable to their home or condo by consulting the Ville de Montréal website.

If my home is worth more, does that mean I can sell it for more? Conversely, as a buyer, do I have to accept that I have to pay more?

The valuation roll created by the municipal valuation office is a mass report that gives a picture of the market value of real estate on a specific date, namely January 1stah July 2021. However, a lot has happened since July 2021. The overheating of the market, marked by numerous overbids, caused house prices to peak in March and April 2021. Since then, the rise in mortgage rates has pushed the price down. The median price for a home on Montreal Island last July was $707,500; in April 2022 it was $772,000 and in July 2021 the median price was $700,000. In short, you buy or sell a property based on its current market value. This price will probably not match the value of the property entered in the municipal register.

If my home’s value goes up, does that mean I’ll have to pay more taxes?

Not necessarily. Assessment is one thing, tax assessment is another. The role makes it possible to determine a municipality’s property tax base, its ability to generate revenue through taxing real estate. The tax rate is not based on the survey form, but on the city budget passed by the municipal councils in the autumn. In this context, Valérie Plante’s government has increased its revenues and therefore property taxes in recent years by around 2% in the same order of magnitude as inflation as measured by the consumer price index (CPI). This year, CPI exceeded 8% yoy in June. The Montreal Metropolitan Chamber of Commerce has asked the city to commit to not increasing taxes by more than 3% by 2023. The City of Montreal will launch a forum this fall to find solutions to diversify its revenue streams that depend more than 60% on property taxes.

Are you telling me that even though my home’s community value will increase by 45% with the new role, I won’t be paying any more taxes? I do not believe you.

Logically, for example, an average 35% increase in the value of a city’s real estate will be offset by a decrease in the tax rate of the same magnitude to keep the same city’s tax revenues more or less constant. However, a home that appreciates in value more than this 35% average will increase its tax burden. On the other hand, the owner who sees his house upgraded by a percentage lower than the average for the agglomeration benefits from a tax break. So in your case, if your house goes up 45% and the rest of the houses go up 35%, you’re actually paying more in tax than your neighbors. We’re sorry !

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