By Diana Ginsberg
John Nowak can’t do the math.
He understands his property has an assessed value of x, but he doesn’t quite understand why his property would fluctuate in value from year to year.
Nowak isn’t the only one confused in Ottawa.
Senior citizens in the Somerset Ward like Nowak may have to sell their properties if their residential property taxes increase in 2006 after their assessments this month.
Nowak, 58, owns a condominium unit near Laurier and Bronson avenues and says it is quite possible he could be forced to sell.
All residential property in Ontario is assessed by the Municipal Property Assessment Corporation (MPAC).
Municipalities then apply the tax rate to the assessed value of the property.
Each municipality sets its tax rate annually, with differences between property classes, such as residential, commercial and industrial.
MPAC sent out notices of residential property assessments in Ottawa on Oct. 3.
“This behemoth has changed our taxes into this unknown equation,” says Nowak.
“I have difficulty with the concept that they aren’t making a fair representation of our taxes. Why, for the same property with no apparent change, am I paying more this year for the exact same services and property?”
Andrew Gougeon, 70, doesn’t understand the equation either.
Gougeon owns a house at 310 Cooper St., but says he will probably have to sell next year because he may not be able to afford the property.
“I’ll definitely be forced out of my home,” says Gougeon.
“My assessment has increased by 23.9 per cent. I’ll be out of there probably in the spring.”
Last year, Gougeon’s home was assessed at $279,000.
This year, his property has been assessed at $325,000.
Gougeon says he feels the assessments are pulled out of thin air and are a tax grab for special projects.
“I just don’t think it’s democratic,” says Gougeon. “They want to revitalize Centretown, but they are going about it the wrong way.”
Somerset Coun. Diane Holmes says the assessment system is highly problematic.
Holmes says the provincial government under Mike Harris brought in legislation capping commercial property taxes in Ontario.
In Ottawa, commercial properties cannot have a tax increase, which, Holmes says, will place most of the tax burden on residential property owners.
Somerset Ward is ranked as having the third highest average residential property value assessment increase at 16.1 per cent, which is higher than in the Glebe, which came in fourth at 15.3 per cent.
Andrew Aitkens is a board member with Centretown’s Citizens Community Association and lives near the intersection of Percy and Nepean streets.
His assessment went up by 19.54 per cent.
Aitkens is a freelance consultant and will not have to sell his property.
However, he has sympathy for the plight of seniors.
“When you think of seniors who are living in their little house that their family bought when they were back in the ’50s, suddenly now because of skyrocketing value, it is worth a huge amount of money,” says Aitkens.
“But they’re retired and live on a pension and won’t realize the value of their homes until they sell them. It may force people out of their homes.”
Richard Patten, MPP for Ottawa Centre, says seniors have the option of remortgaging if they find themselves short of cash, because they are sitting on a big asset as their properties are now more valuable.
“Their borrowing power and net worth have increased,” says Patten.
“Even so, we definitely need to create programs to help seniors manage expenditures with the increase in value of their homes.”
Nowak, however, advocates another solution.
“We need to look at the geniuses that instituted this system…someone has to yell ‘stop.’”