Hi Steemians,
Do you need to save money on property taxes in Canada?
Consider buying homes that are exchanging hands from one home owner to the next in the chain of titles vs. buying a brand spanking new home from the builder.
One creative way to save on your property tax bill on your next home purchase.
New homes are typically assessed by MPAC (Municipal Property Assessment Corporation) at ~1 % of the current value of the home. This figure can often be higher than what is assessed for older comparable properties, especially in a heated market where prices are on the rise. And so, typically there is a pattern seen, whereby older home valuations, for property tax purposes by MPAC, tend to lag behind current market value of the comparable home. This is due what is called “phase-in” provision in the Assessment Act, to allow market stability and predictability in future property tax increases over 4 year increments. Therefore, an assessed value is set by MPAC every 4 years and that amount is gradually phased in over the next 4 by a fixed %. And more often than not, that fixed % is no where near the true appreciation of those houses in that area as dictated by market forces. This is good news as it -> translates into savings for current home owners and new purchasers of older homes.
Personal story:
I was once putting an offer on a property whereby there was a huge discrepancy between market value from sold listings vs assessed value of the home by MPAC and I had to remind my client that we could not low ball the seller at the assessed value for reasons mentioned above 😂😃
Until next time......
Shervin M.