Property Taxes

Provide the municipality with the funding it needs to provide services to its residents –Garbage collection, libraries, pools, parks, police, fire Municipalities must calculate at what rate to tax it’s residents. Amount of tax you will pay is based on –Value of your property –Value of all the properties in your municipality, –Amount of money needed by the city

Property Tax Terminology Assessed Value –the most probable selling price for a property –varies based on location, building style, and size of the property. Property Classification –Based on its use –Residential, commercial, industrial, agriculture.

Property Tax Terminology Portioned Percentage. –Determined by property classification –A certain percentage of your homes value used to calculate taxes owing. –Need to know – Residential and Farm! CodeClassPercentage 10Residential 145.0% 20Residential 245.0% 80Residential 345.0% 30Farm Property30.0% 40Institutional65.0% 51Pipeline50.0% 52Railway25.0% 70Golf Course10.0% 60Commercial (other)65.0%

Property Tax Terminology Portioned Assessment –Based on portioned percentage You are only assessed this percent! Land and buildings calculated separately –Rounded to the nearest $10. –Example Residential home, assessed at $150,000 –Portioned Assessment = 0.45(150,000) = $67, 500 –Total for all property in a municipality called Total Portioned Assessment

Property Tax Terminology Property Tax Rate –Rate at which property owners will be taxed –can be expressed as a percent, as cents per dollar, or as a mill rate. As a percentage – Mill Rate –the rate of tax per $1000 –multiply percent by 1000 to express rate in mills

Example 1 Sarah Mahler owns a home in Flin Flon. The market value assessment of the land is $7350 and the building is $76,500. –Find the portion percentage –Find the total market assessment. –Find the portioned assessment

Example 2 A town requires revenue of $4,500,000 to be raised from property taxes. The total portioned assessment of all taxable properties is $200,000,000. –Find the tax rate expressed As a percentage rate. In cents per dollar. In mills.

Assignment Page 155 #1 – 10

Municipal Finance Property and Education Taxes

Education Taxes Property taxes include –Municipal taxes –Education taxes Taxes charged by both the local school board and the provincial government.

Municipal Taxes Actual dollar amount of taxes to be paid –Includes General municipal taxes –calculated using the mill rate (rate of tax per $1000 assessed) Local improvement taxes. –based on cost of the improvement per frontage foot –We will consider frontage to be the width of the property

Education Taxes Supports school divisions in the province. Provincial Education Tax #1 or #2 –Mill rate set by provincial government All property owners only pay one tax (#1 or #2) School Division Tax –Mill rate is set by the local school division

Example The Wallace family owns a home with a market value assessment of $71,500 and a land assessment of $13,500. The municipal mill rate is mills, the Provincial Education Tax #1 rate is mills, and the School Division tax rate is mills. The property has a frontage of 50 feet. The family is charged local improvement tax for road oiling and lane lighting.

Example – continued Calculate the total Portioned assessed value Annual municipal taxes Annual education taxes Annual municipal and educational taxes $71,500 and $13,500. Municipal: mills Prov. Ed. Tax #1: mills School Division: mills. 50 feet: local improvement tax – road oiling – lane lighting.

Assignment Module 2 Lesson 4

Municipal Finance Statement of Demand for Taxes

Property tax statement –Outlines your property, and the taxes you owe. –Vary slightly from one area to the next but generally the same Part 1 – Property Description Part 2 – Municipal Taxes Part 3 – Education Taxes Part 4 – Provincial Tax Credit Part 5 - Summary

Property Description How much Property on the road Assessed Value Values of each individually T- Taxable For all our examples 10 or 30 45% or 30% You will need to find this!

Municipal Taxes Portioned Assessment Municipal Rate Amount to be paid Local Improvements Description How long they will take Frontage (for this course) Cost per frontage foot For each improvement Total to be paid for local improvements

Educational Taxes Portioned Assessment again… Provincial Tax #1 – Homeowners Provincial Tax #2 – Farms All property owners pay School Division Tax Rates as given Amount to be paid

Provincial Tax Credits Money given to property owners by the Provincial Government The amount will be given to you if it applies

Summary Just fill in the values from above All taxes added together, credit is subtracted to find taxes due!

Assignment Assignment 4