Quote:
Originally Posted by GGG
In that article is the 4.4% hike the change in mill rate, the change in city budget, or the average property tax increase for each homeowner?
If it is a 4.4% increase into the city budget that is a remarkable number coming of a year of 7% inflation.
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It's the increase in overall revenue from property taxes. That's how the City does budgeting: they develop the planned spending, factor for user fees and other sources of revenue (e.g. parks reservations, public pool admittance, parking revenue, bylaw fines revenue, Enmax's annual dividend, etc.), and come up with a sum total of property tax revenue required to cover that spending. They also have to factor in an amount of property tax to be collected and remitted to the provincial government.
Mill rates are figured out backwards from the required property tax revenue and the sum total assessed property value of every property in the city:
mill rate = (overall amount of property tax revenue required / overall property value) * 1000
(In reality it's broken up into residential and non-residential rates, but that's the gist.)
Your property taxes owed = your property value * mill rate / 1000
In effect, if your property value doesn't appreciate as much as average you will pay less than the budget increase, and if your property value appreciates less than the percentage increase of overall property value in the city / the percentage property tax increase, your property taxes owing goes
down.
E.g. if property values overall go up 10%, property taxes go up 5%, and your property value doesn't go up by at least 4.76% ( = {[1.1/1.05] - 1}*100), your property tax bill will go down.
(This is just a very simplified representation, as I said there's more to it because there's a split between residential and non-residential, and the province takes a cut.)