Quote:
Originally Posted by trueviking
i did wonder about that actually....but I have no idea really how taxes are arrived at...it isn't straight assessed value.....how does it work?...can it be easily explained?
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Yeah for sure. Winnipeg has probably the most complex property tax regime in Canada thanks to provincial legislation. People - especially those outside Manitoba - often screw up comparisons because they forget a step in the calculation. Basically to calculate taxes, you multiply a property's assessment value by it's portion amount (which depends on the property classification), divide it by 1,000, and then multiply it by the current mill rate to get property taxes owed. The portion value for properties depends on the property use. Residential properties pay tax on 45% of the assessment value, and commercial properties pay tax on 65% of the assessment value. Other property uses have different portion values, but I won't get into that here.
For the property at 157 Scott Street, the current assessment is $85,000 for "other" and $55,000 for "residential". So to get the municipal property tax bill, you first determine the portion value (45% for res, 65% for other), then divide by 1,000, then multiply by the mill rate. So the municipal tax bill is currently (((85,000*0.65)+(55,000*0.45))/1000)*13.468=$1,077 per year.
Now if the property was transitioned entirely to residential with an assessment value of $300,000 as the blogger proposes, then the new tax bill is ((300,000*0.45)/1000)*13.468=1,818 per year.
The net difference from the property improvement is +$741 per year, all else held equal. So if we consider the city forgoing the $20,000 application fee to allow the improvement to happen, it would take $20,000/$741=27 years for the forgoing of the fee to "pay for itself".
FYI, most other cities have a much less complicated calculation. Visit Calgary's, Toronto's, or Vancouver's website and you'll see very simplified methodology. Often times they just express their municipal tax rates as a percentage (i.e. residential property tax = 1.1% of assessed value). They have no need for all this complicated portion value stuff. Some will point out that Saskatchewan also uses portion values like Manitoba, but their portion values for most property types are 100% of assessed values, so it's basically a non-issue there.