Column by Osprey News Network
By James Wallace
Osprey News Network
April 15, 2006
MPPs from around the province have fielded calls with increasing regularity in recent days from disgruntled home owners, especially seniors, complaining about crippling property tax assessment hikes.
The calls have come from retired people worried about losing their homes, from middle class families who find the tax bill on their home has become unaffordable and cottage owners worried about having to sell the property that's been in their family for generations.
Little surprise then that MPPs from all three parties this week supported second reading of a private member's bill by Erie-Lincoln MPP Tim Hudak to cap assessment increases.
"No doubt my colleagues in the PC caucus, the NDP and Liberal caucus, have heard stories about tax payers across the province who can no longer afford skyrocketing property tax assessments on top of hydro increases, tax increases and other utility increases," Hudak said during a Queen's Park press conference.
Under Ontario's current or market value assessment system, property is taxed according to what it's worth on the open market and every property's value is updated annually.
On the positive side, that means everyone pays for municipal services according to a common yardstick Ð the value of their home.
On the negative side, it means property assessments and therefore taxes follow house prices through the roof. For seniors and others in this double-edged predicament, the increase in equity raises their paper worth but is forcing growing numbers to abandon their retirement or dream homes for cheaper housing.
Vaughan Mayor Michael DiBiase, who attended Hudak's press conference to support the Bill, said assessments in his community have jumped from 35 to 72 per cent under market in the past few years.
"Some seniors have worked so hard all their lives to have a home and now all of sudden we're seeing they have to move out, they cannot stay there anymore," DiBiase said.
"That's ludicrous."
Hudak's Homestead Act, which is also supported by Sarnia, North Bay and Port Colbourne councils, will now go to public hearings. While it remains a long-shot to become law, it could spur the Liberal government to enact legislation of its own.
The bill, which draws on similar legislation in 11 U.S. States and Nova Scotia would:
- Cap residential property tax assessments at five percent per year. The cap would come off once a property is sold to a new owner;
- Allow home owners to make up to $25,000 in home repairs, alterations, improvements or additions without facing an increase in their property assessment;
- Exempt seniors and the disabled from paying tax on the first $10,000 of assessed value on their principal residence.
Bob Topp, whose Waterfront Ratepayers After Fair Taxation group represents 100,000 waterfront property owners province-wide, suggests Ontario's current assessment system is destroying a way of life in this province.
"Cottaging in Ontario is like Tim Horton's, only a lot longer in history," Topp said. "It's all income levels have a little piece of waterfront property if they can swing it."
Waterfront properties have experienced massive assessment increases over the past decade, resulting in unpredictable and unmanageable tax increases Ð most recently in the 50 to 60 per cent range, Topp said.
"Property owners can look forward this summer to devastating tax hikes," he said. "The tax bite is going to make (cottage ownership for some) almost impossible."
Unless there is change, Ontario cottages will soon become a refuge for the rich because only the rich will be able to afford to carry the bills, Topp warned.
"This is clearly a broken system," he said. "It affects seniors, young families, year-round and seasonal residents."
Ontario's Snowbirds are also up in arms over assessment hikes.
Lawrence Barker, executive director of the Canadian Snowbird Association, said it's increasingly becoming a burden and hardship for seniors and retirees on fixed incomes to maintain a winter residence elsewhere and a highly taxed summer home in this country.
Barker has fielded calls from a number of Snowbirds recently who say they can no longer afford to travel and maintain a Canadian home, which for man ends a lifelong dream.
Ontario's Ombudsman, in a fairly scathing report (and since it was titled "Getting It Right, that's fair comment), had little good to say about the fairness, accuracy or integrity of the provincial property assessment system or the government body tasked with determining assessments and recommended a number of substantive changes.
Dwight Duncan, the Liberal government's finance minister, is the man ultimately in charge of Ontario's property tax assessment system.
His government certainly did not create this mess nor did the former government, which made an effort to fix the mess it inherited.
But someone needs to fix it.
It is not currently a priority for the Liberals but if the screaming gets louder, it will be.
James Wallace is the Queen's Park bureau chief for the Osprey News Network.
Contact the writer at: jwallace@ospreymedialp.com or at www.ospreyblogs.com