The mayors of five major cities across Canada have come together to call on the provinces to give them “increased revenue powers” to charge tolls on roads and bridges. The full text of open letter is reproduced below. The mayors complain they don’t have the money necessary to build the infrastructure Canadians need. They say “city governments have been required to rely on property taxes alone to support our growing operating budgets, with dollars stretched thinner and thinner as we serve the growing needs of the public.” Apparently, property taxes are not enough. I find it frustrating that the substantial property taxes I pay don’t seem to be enough. Over the past decade or two, city governments have added user fees to everything they can. So, I pay these fees in addition to my property taxes. The prospect of greatly “increased revenue powers” for the city isn’t a happy one for me. I believe it’s important to fix and grow infrastructure, but why can’t some of my property tax...

A wave of new property tax assessments has hit Ontario homeowners. The form we receive is a blur of numbers, and it’s not easy to figure out what will happen to your property taxes. In fact, we’re still missing one key piece of information to work out our 2013 property taxes. My home’s assessment went up 23% from 2008 to 2012. Does this mean my taxes will go up 23%? Nope. Assessments get phased in over 4 years. My phased in assessment increase for 2013 is 5.7%. Does this mean my taxes will go up 5.7%? Nope. There’s more to it than that. My form tells me that the average phased-in assessment went up 6.4% in my area. So, my assessment actually went up 0.7% less than the average. Does this mean my property taxes will go down 0.7%? Hahahaha! Property taxes don’t go down. The average property tax increase has nothing to do with assessments. Each municipality goes through a drawn out political process to decide on a tax increase. It begins with strong talk of a 0% incre...

In Ontario, the Municipal Property Assessment Corporation (MPAC) administers the property assessments used to determine property taxes. I just discovered that MPAC’s estimated area of my property is way off. However, the official Request for Reconsideration process is onerous enough that I probably won’t bother to appeal. My fun began when my latest property assessment arrived in the mail recently. The form contains an “access key” which allows me to look up the data MPAC has about my property at their About My Property web site. This seems quite civilized. It was after poking around on this site for a while that I discovered that MPAC thinks my property is about 24% larger than it really is. My best guess is that this has cost me about $1500 in extra property taxes over the years. The problem is that my property is not rectangular. The way MPAC estimates the width is sensible, but the estimate of depth is way high. In a burst of optimism, I started poking around for t...

A reader sent some thoughtful criticism on my article on gasoline taxes . This criticism forced me to organize my thoughts. Her lightly edited remarks follow. “Everyone gets hurt by gas taxes because they drive up the cost of doing business and the price we all pay for everything. And they’re regressive, because the people who can least afford the increased prices are the poor. Mixing social engineering with tax policy may make the environmentalist and cycling lobbies feel good, but if green energy isn’t competitive (and frankly it never seems to be), manipulating the market with taxes to disadvantage other energies really isn’t the right solution.” There are several arguments here. Let me take them one-by-one. Gasoline taxes drive up all costs This is largely true. However, all taxes drive up costs. They drive up costs by exactly the amount of tax money collected. It’s true that gasoline taxes drive up the costs of almost all goods and services, but so does the HST. In...

Every year most large cities go through a painful budgeting process that usually results in property tax increases. A particular pet peeve of mine is hearing city bureaucrats or politicians describe some change as a cost savings when it is really a tax increase. Over the years I’ve been a homeowner I’ve seen an explosion of user fees for city services. These services were once provided free of any additional charge and paid for from general property tax revenue. Now they are at least partially paid for by user fees. Leaving aside the question of whether slapping user fees on everything is the right thing to do, it is annoying to hear some bureaucrat or politician describe the change as a cost savings rather than calling it what it really is: a tax increase. If the change were made in a revenue-neutral way that would be one thing, but that’s not how it works. If the city collects $100 million in property taxes one year and collects $100 million in property taxes the next year ...

This week I got my notice from the government about how much they think my house is worth. They clearly didn’t spend much time on my house because my assessment went up by exactly the average amount in my area, 13%. Fortunately, this doesn’t mean that my property taxes will go up by 13%. City governments don’t collect more taxes when property values rise and less when property values fall. What actually happens is the city decides on the total amount they will collect from homeowners, and then divides that amount among homeowners in proportion to assessed property values. For example, if the city needs $1 billion from us, and the total value of all houses is $80 billion, then the tax rate is set at 1/80=1.25%. A house worth $320,000 would pay $4000 in property taxes. If property values had plummeted to a total of $50 billion, then the tax rate would have been set at 1/50=2%. The house that was worth $320,000 in good times is probably worth only $200,000 in bad times, but would st...

Seniors who pay property taxes in Ontario can look forward to a tax break starting next year. The maximum amount of the tax break for 2009 is $250, and for subsequent years it is $500. The tax reduction won’t come off the city tax bill directly, though. This program is part of the Ontario Tax Credits. Seniors who qualify and submit form ON479 at income tax time will get a tax deduction or rebate on their income taxes. In 2009, a senior couple with a combined income under $45,000 will get the whole $250, and the amount of deduction drops off to zero for combined incomes over $60,000. Single seniors in 2009 whose income is under $35,000 will get the whole $250, and the amount of deduction drops off to zero for incomes over $50,000. It’s hard to disagree with a policy like this when you imagine an elderly widow living in near poverty being forced from her home because she can’t afford the property taxes. However, this does shift the tax burden slightly from seniors to younger people,...