By Zenab Bagha
Most Centretown homeowners are facing property assessment increases of between five and 10 per cent, but few are complaining.
Somerset ward Coun. Elisabeth Arnold says she hasn’t received many calls from residents of Centretown about the assessment increases.
Capital ward Coun. Clive Doucet has been asking his constituents to call the Ontario Property Assessment Corporation to protest the recent assessments, which he says have gone up by 30 to 40 per cent.
“We haven’t had the same number of calls as Mr. Doucet, but to be fair, I don’t think we have the same problem in Centretown,” says Arnold.
But Chantal Hurtubise, a caseworker at the Housing Support Group, which assists people in finding rental accommodation, says it might be a few months before lower-income residents in Centretown feel the effects of the increases.
If property taxes go up, rents could go up as well. “If a landlord’s taxes have gone up by $200, who knows? But if it goes up by $1,500, then the landlord might decide to increase the rent, ” says Hurtubise.
However, landlords can only increase the rent on their property once a year. In order to increase it again within the same year, landlords must take their cases before the Ontario Rental Housing Tribunal. The entire process could take a few months.
Rent increases would put further strain on an already overburdened housing market, says Hurtubise. “There is such a need for housing that we’re seeing unbelievable listings, like a bachelor apartment for $1,000 a month. The rent is being geared to the high-tech workers, and landlords are reluctant to rent to people on fixed incomes…”
There is a high demand among young professionals for housing in Centretown, says Jeffrey Rosebrugh, a real-estate sales agent at Royal LePage. “Houses are selling very well in the Centretown area … I would say there’s been approximately an eight to ten per cent increase in sales within the last year.”
Assessment rates went up by an average of five per cent across the city largely due to the high demand for housing, says Lorne Hess, an evaluation manager at the Ontario Property Assessment Corporation.
Property assessments estimate the market or current value of the property and are used by local municipalities to calculate property taxes. The value of a property is determined by its market value, location, size, age and the quality of its improvements. For example, properties on Gilmour, McLeod, Lisgar and Cooper streets tend to sell well and therefore have a higher market value than houses on Arlington, Argyle and Florence streets, which are “traditionally harder to sell,” says Rosebrugh.
Property taxes are calculated by multiplying the property assessment by the tax (mill) rate. The new assessment increases will mean higher property taxes, unless the new city of Ottawa cuts its tax rate.
Tax rates generally go down when property assessments are increased, says Hess. Assuming the tax rate doesn’t change, and the city requires the same amount of money it did last year, then it would end up collecting more money in property taxes than it needs. To prevent that, the city usually lowers the tax rate, explains Hess.
But there are concerns that this year transition costs of the new city will discourage the new council from lowering taxes.
“(Property assessment increases) will certainly be something we look into when the budget process commences in February or March,” says Arnold.
“This council was elected on a mandate to contain costs, and that is why we are trying to get the province to pay the cost of amalgamation.”