Taxes for both the Town and the County are spread amongst classes (categories) using ratios. Residential has a base of 1.0, so if a class has a ratio less than 1.0, then for a given valuation, taxes will be less. As an example, the farm ratio is 0.25 so valuations of farms will be 4 times that of a residence for the same tax. But “multi-residential” was previously set at 2.2160 and “industrial” class was set at 2.6300 so their taxes were more than double for the same valuations. However, both multi-residential and industrial were deemed to be too high so will now be lowered to 2.0000 and 2.4800 respectively for 2018 taxes. This means that taxes for multi-residential will go down by 4.93% and taxes for industrial properties will go down by 5.37% while taxes for residences will increase by 0.36% to keep the total tax levy constant. These changes were the result of a review which in turn was mandated by a change in Provincial law. The change for multi-residential is intended to make the construction of Rental properties more attractive. Although it’s decided by the County, the change also affects Town taxes and probably also school taxes (why not?).
At right is a table showing the effect on the County levy – as you can see, 82% of taxes come from residential properties with only 3.3% coming from multi-residential (apartments). That’s why the impact is small.
The County’s newsletter says:
For the average single detached property, the estimated impact of these updated policies to the County portion of property taxes is approximately $4.00, for a total of a $23 increase for 2018. (See link below to full newsletter).
As reported previously (see link below), developers of Rental properties also get another boost with a plan to rebate development charges for Rental Properties. The money for this comes from the Provincial tax base, not municipal taxes.
But there’s more: another area that is being discussed is the rebate for vacant commercial properties. Provincial legislation empowered municipalities to stop the practice but consultation with the public is required – this is scheduled to happen in March 2018 (next month). That has the potential to reverse some of the increase since vacant stores would pay more tax.
- Council News – Feb 22 (County) [By the way, wouldn’t it be worthwhile for Cobourg to produce a similar newsletter?]
- Report to County Council on Tax ratios
- Housing in Cobourg – 16 Feb 2018 – Report on development charges rebate plus overall house prices.
- Vacant Property Tax rebates to be reviewed – 30 July 2017
- Municipal Tax Reforms – 11 March 2017 (discusses farm ratio of 0.25 and vacant property tax rebates)