Ontario homeowners will see the determined value of their houses rise 4.5 per cent in each of the next four years — and may face tax increases as a result — following a report that found property values have risen 18 per cent since the last update in 2008.
The report released Tuesday by Ontario’s Municipal Property Assessment Corp. said property owners will see an average assessment increase of 4.5 per cent in each year for the next four years as it phases in the increases.
Any tax increase based on the new assessments could put a greater financial squeeze on some cash-strapped owners at a time when interest rates could also go higher.
However, an increase in a home’s value doesn’t necessarily mean property taxes will rise. If the assessed value of a home has risen by the same percentage as the average in a given municipality, there may not be an increase in taxes, said the organization, which is funded and operated by the province’s municipalities.
“Our values reflect local real estate markets and confirm that most homeowners in the province have seen the value of their homes increase over the last four years,” said Larry Hummel, MPAC’s chief assessor.
A preliminary report published in July suggested property values grew by 17 per cent since 2008, noting some of the most significant growth was in Ottawa and northern Ontario.
MPAC will mail notices to Ontario’s nearly five million property owners between September and November. Owners can check the accuracy of the assessment at this website, which allows owners to compare values in their neighbourhood.
“Property owners should ask themselves if they could have sold their property for its assessed value on Jan. 1, 2012. If the answer is yes, then their assessment is accurate. If not, we are committed to working with them to get it right,” Mr. Hummel said.
MPAC assesses properties across the province based on current values. The most recent assessment is based on valuations on Jan. 1, 2012. The previous report was based on values on Jan.1, 2008.
The four-year time frame for assessments means owners could be paying taxes based on values in January, 2012, when the market was still robust, until 2016.
Canadians who could face the biggest strain on finances are those who have piled on debt to get into the market while interest rates are low. Officials have repeatedly told Canadians to reduce record debt loads of 152 per cent of income and warned some could find themselves in trouble when rates rise.
Meanwhile, Canada’s real estate market is showing signs of cooling off following a post-recession boom sparked by the move to ultra-low interest rates.
Earlier this month, the Canadian Real Estate Association reported that sales of existing homes fell 5.8 per cent in August from July, and were down 8.9 per cent from August, 2011.
Still, the latest data shows that while sales and listings are down, prices appear to be holding steady.