Linda Leatherdale says retirees may be forced to sell
By Linda Leatherdale, Business Editor, Toronto Sun
Sept 26, 2004
HOW FAIR is this? Back in 1957, Garth Legris bought a lodge on Lake Muskoka for $30,000 in hope of living and working at home.
But earnings from the lodge weren't enough to support his family, so he went back to being an auto mechanic and made his waterfront property the family home, where he and his wife raised their two children.
To the Legris family, the century-old wooden Bala house is "home sweet home" and moving never crossed their minds -- until skyrocketing property tax bills started hitting the mailbox.
"This is forcing us to sell," sighs Legris, a retired 74-year-old, who survives on Canada Pension Plan payments, Old Age Security, plus income from a retirement savings plan, which has been squeezed by low interest rates and sagging stocks.
Legris remembers only paying $300 in property taxes some 40 years ago -- a yearly bill which escalated to a couple thousand dollars for services like sewers, municipal water, garbage pick-up, road maintenance and snow ploughing. Legris is thankful for the services and to give back to the community, he served as chief of the volunteer fire department.
But now, without any new increase in services, his property tax bill has tripled to $5,770 -- and he warns if assessments keep heading higher, he and his wife will be forced to sell.
Legris is among thousands of waterfront property owners being squeezed by skyrocketing property taxes, thanks to Mike Harris' Tories' move to MVA (market value assessment), also known as CVA (current value assessment) -- which gave birth to a new bureaucratic nightmare, the Municipal Property Assessment Corp. (MPAC).
Queen's Park also took over control of education spending, while downloading the costs of other services, like welfare, onto the backs of municipalities. And to complicate matters further, the Tories pushed ahead with amalgamation of municipalities, with revolts still burning brightly across Ontario.
The bottom line is with a record bull market still gripping real estate, and demand outstripping supply in desirable areas such as Muskoka, property values are up and so are tax bills, especially if it's waterfront.
Celebrities such as Goldie Hawn, who own property in Muskoka, may not bat an eyelash. Nor may the rich, who've converted paper wealth to buy or build their dream getaways. But for longtime owners, many now retired and living on fixed incomes, it's a property tax nightmare.
Muskoka may be known as the playground of the rich and famous, but it is also home to some of the lowest incomes in the province. One-third of all waterfront properties in Ontario are owned by full-time local residents.
South of Gravenhurst, on a smaller lake that is growing in popularity, Norm Page watches a glorious September sunset from the deck of his "cottage/home" and wonders if he can afford to stay.
Page, now 75, bought his Kahshe Lake cottage back in 1959, and in 1976, when he retired from an executive job in insurance, he and his wife moved from London, Ont., to make the cottage their home. It's very much a family place for their four children, spouses and grandchildren. In fact, his son Ed loves Kahshe Lake so much he's building his retirement home next door.
TAX BILL ROSE 60%
But skyrocketing property taxes are killing their dreams. Ed fears he may have to sell before even moving in, and Norm -- whose property tax bill is up 60% even though he has few municipal services -- worries about how he'll pay.
"It's not fair. This market value assessment system is out of whack," Page said.
Nobody knows it more than Bob Topp, who was a member of the Muskoka Municipal Taxation Task Force, and is now executive director of WRAFT (Waterfront Ratepayers After Fair Taxation.) WRAFT was recently formed to fight for tax fairness for waterfront properties, and so far close to 60 cottager associations across Ontario have joined. Go to wraft.com or e-mail wraft@sympatico.ca.
In 1978, Topp -- a retired chartered accountant, who worked for a Toronto investment firm -- inherited an island on Lake Rosseau, which had been in the family since the 1940s.
A few years ago, his property assessment doubled from $250,000 to $500,000, then fell by 30%, and in the latest assessment was up another 50% to $570,000.
In chatting with local assessors, he was advised values of island properties were escalating sharply, and he could see another big jump in his assessment.
"I could rent it out, or sell. But my kids are very attached to it," said Topp, whose organization is fighting for property tax reforms, to halt the shift of the tax burden to waterfront properties. He points to Nova Scotia, where legislation was passed in May to cap future assessment increases.
Meanwhile, complaints from across the province continue to pour in.
Jane Stock complains her property tax bill jumped from $3,515.06 to $7,451.79 in just three years. "We are seniors on fixed incomes ... things are getting desperate."
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UNITE TO FIGHT TAX
Fed up with property tax madness?
Go to taxpayer.com, where the Canadian Taxpayers Federation has a petition and solutions. Bottom line, pegging property taxes to real estate values, which can boom or go bust, does not reflect the cost of services municipalities supply, or our ability to pay. Nor is it fair to tax us on a gain we've never realized.
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WATERFRONT PROPERTY ASSESSMENTS SKYROCKET
Ontario's top five areas. Percentage change in property assessments from 1999 to 2003:
Municipality of Central Huron (Huron County) 78.27%
Municipality of Bluewater (Huron County) 75.19%
Township of Matachewan (District of Timiskaming, near Kirkland Lake) 71.99%
Township of Lakes of Bays (District of Muskoka) 69.77%
Seguin Township (District of Parry Sound) 64.60%
Source: MPAC