Real Estate Talk

LET’S TALK PROPERTY TAXES

By Jay Lough Hayes, Peterborough Realty Inc. 705-772-1025

Do you know where your tax dollars are going?

Years ago, I watched a great movie named ‘Dave’. If you haven’t seen it, take 2 hours and watch it. A 1993 film starring Kevin Kline, who is the president of the USA. There’s a scene in the movie where Dave has his friend, an accountant, come over for a visit. As they’re going over the budget for America, the accountant looks at Dave and asks, “Geez Dave, who’s doing your books?”

We all pay taxes of some kind. For homeowners, when you buy a house, Municipal Property Assessment Corporation (MPAC) assesses the value of all properties in Ontario. Through direction provided by City Council, the City drafts a budget that reflects community priorities, expected service levels and legislated responsibilities. For the most part, the 2020 Budget maintained existing service levels. The 2021 budget includes $292.2 million in spending on municipal services and $70.7 million in capital investments.

Where does the City get money?

Your property taxes include Municipal and Education taxes and go to both the city and the provincial government: - Tipping fees (city dump fees), - Engineering capital Recoveries, - Transfer from Provincial gas tax reserve, - Conditional grants from the Municipal, Federal and Provincial government, - Casino Revenues (what did we do before the casino moved in 3 years ago?), - Sewer Surcharge portion of your property taxes go to the City for municipal services and infrastructure. Remember flushing your toilet? Water in – water out. - Other fees and service charges, - Transfers from other reserves, - Other corporate revenues, - COPHI dividends (City of Peterborough Holdings Inc.), - Parking, - The education portion goes to the province, - Federal Gas Tax Fund ($4,916,411 in 2020).

How does the city spend that money?

Your tax dollars go toward City services and infrastructure such as plowing roads, paths & sidewalks in the winter, collecting garbage, maintaining the landfill, picking up and processing recyclable items from your blue boxes, building and operating the sanitary sewer and sewage treatment systems to protect public health and the environment, providing social services, supporting affordable housing, running recreation programs, maintaining playing fields and arenas, Implementing sustainability initiatives, Peterborough Transit, Peterborough County/City Police, fire and paramedics, City council, transfers to organizations, community services, Fairhaven long-term care, Otonabee Conservation, parks and forestry, Peterborough Public Health, Peterborough and the Kawarthas Economic Development, Peterborough Humane Society, Downtown Business Improvement area, Greater Peterborough Innovation Cluster, Arts, Culture & Heritage, Social Services, City Planning, Legal, City Clerk’s office, financial services, Peterborough Airport, Transportation Planning & Traffic Operations, plus half a dozen more that can be found on the City of Peterborough website.

Every day, you use community services or infrastructure in some way. Have you tried to find two roads that are not dug up every summer? That’s our infrastructure tax dollars at work.

In 2020 the City of Peterborough paid 258 people over $100,000/year to work for you. Some are over $200,000/year+benefits+pension. That falls under Public Sector Salary Disclosure and our tax dollars at work. This is all on the city website.

“Your property taxes are going to up and could double with provincial reassessment.”

Very few of the services we enjoy are selfsustaining. The Art Gallery had a shortfall of $565,906. Peterborough Library had a shortfall of $3,071,295. YIKES! Didn’t Peterborough taxpayers just pay $12 million while the structure underwent renovation? Wait! Wasn’t there a $600,000 renovation in 2014 by +VG Architects – The Ventin Group from Brantford? Jennifer Jones, CEO, admits there aren’t any more books or DVD’s in our new library but, “There’s so much light coming in here, it’s open, there’s such a vast visual line to everything, it’s just a wide open space”. It just can’t pay it’s own way. Read the 2021 City Budget highlights.

Because 2020 and 2021 were such boom years for real estate, I was concerned for every homebuyer. As a realtor, when we list a home, we use the city of Peterborough’s website (www.peterborough.ca/Modules/Tax/PropertyTax.aspx), calculate your property taxes and include this information as part of your listing. Because municipalities are still using the 2016 assessment value, property taxes appear to be pretty reasonable. BUT, as the province has postponed property reassessment because of Covid19, this too will change, predicted in 2022. I asked an employee at MPAC Peterborough office if the province could increase the property taxes to reflect the purchase price. He explained the province would defer that decision to each city and, based on that city’s budget, the city or county decides how much to increase taxes. To support services and infrastructure, the City Draft 2022 Budget includes a 2.75% all-inclusive property tax increase per $100,000 which equates to an increase of $45.17 annually.

So, you bought a house here in Peterborough and paid $600,000. The property taxes provided by your realtor indicate taxes based on the province’s property value assessment from 2016, likely about $235,000. Your property taxes are going to go up and COULD double with province reassessment.

All the homes in the city purchased and renovated into 2 units now with 4 cars in each driveway double the strain on the infrastructure, water usage, sewage facilities, garbage, policing, roads, schools, the system, all requiring constant upkeep, in need of tax dollars. Yes, there’s a housing shortage but that’s another story.

The former YMCA building, purchased from the City of Peterborough for $1 in 2007 (appraised at $2 million), hit the 2014 real estate market at $1,475,000. In 2007, the city turned down an offer on that building from a Toronto developer for $2.5 million. That’s a lot of tax dollars. As of December 2019, Peterborough City Councillors planned to give $1 million in grants, under the Central Area Community Improvement Plan, toward the $50-million conversion of the former YMCA building downtown into upscale apartments called Y Lofts. The project is also eligible for $30,000 under the city’s facade improvement program, plus $55,945 in waived building permit fees. Tax payers dollars at work. And this will not help the housing shortage. Leasing rates are $1,520 up to $5,500 (prices on rentcafe.com). Just imagine taking that $1,085,594 + the $2.5 million that the city turned down in 2007 and building our own apartment building that really is affordable housing. Will $1,085,594 of tax dollars really make a difference to this Toronto developer?

Reading the 2021 recommended budget, Housing and Homelessness = a shortfall of $5,679,574. And we just gave a land developer $1,085,594 tax payers dollars.

To continue enjoying the city/county services, we all have to pay property taxes. So, who is doing your personal household budget?

Call me anytime, no obligation to find out what your home is worth in today’s market.