I received my new Property Assessment Notice today from MPAC. All properties in Ontario will receive a reassessment this year. (Average residential changes are (or will be) available online (depending on municipality).)
Anyway, the MPAC value for my house has increased 26.9% over the 18 months since the last assessment, compared to 11.93% average for Toronto. As much as I'd like to complain, I know it is probably right. We were underassessed before, and I do think I could have sold the house for that price on the valuation date of January 1, 2005.
This means my taxes are going up. Not everyone who gets an increase in assessment gets a tax increase; the resassements are actually revenue-neutral. Your tax shift depends on how your taxes change relative to the average.
My City of Toronto taxes are going to go up about 17% for 2006. My house has increased in value 13% more than the average (1.269/1.1193), and I assume there will be a further 3% increase for the municipal budget (1.1337x1.03). My provincially-pooled education taxes might be even worse, since they'll be compared to the Ontario-wide average (which is not available yet).
The peculiar way in which property taxes work forms an interesting comparison to how the federal and provincial governments raise funds. If average incomes or average sales revenues were up by 11.93%, the federal and provincial governments would be swimming in money. They'd be able to cut your taxes, win kudos for that, and still have a lot more cash on hand.
Municipalities, however, don't benefit from this rise. The MPAC increases are factored out. That's fine, I guess. But it means that every year the City needs a "tax increase" just to keep up with inflation. And the way the political debate is framed, that can be difficult. Taxpayers think municipal taxes keep going up out of control, but really the municipalities are taking a smaller share each year when compared to the other levels of government.
There are a lot of things not to like about current-value property taxes as the prime revenue source for municipalites. In Toronto, one factor is that they promote sprawl by concentrating taxes on the valuable properties in the old city that tend to be in walkable, transit-focused, mixed-use communities. CVA is also unfair to people on fixed incomes -- frequently seniors -- who bought their houses a long time ago in areas that are now gentrifying. But this is a story for another time...
I don't see any sign of Dalton McGuinty trying to fix this system. He has enough Harris-era crap to deal with.