Taxes: Fighting city hall

Bragging about how much our homes are worth has become something of a national pastime in recent years as real estate prices have shot skyward. But arguing that your home is worth less can save you thousands of dollars.

Property taxes are usually based on what government assessors think your house would fetch on the market. The higher the assessed value, the higher your taxes. A homeowner in Mississauga, Ont., with a house valued at $300,000 will pay $500 less in taxes a year if he can prove it’s worth only $250,000. His total savings could multiply to $2,000 since homes are assessed only every four years or so.

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Getting your assessment lowered is time-consuming but not impossible. You should start by calling your local assessment office and asking to speak to the person who valued your home, says Bob Topp, chairman of the Coalition After Property Tax Reform, a citizens’ group based in Toronto. That’s what he did four years ago when the assessment on his cottage near Parry Sound, Ont., doubled. Topp, a retired investment specialist, told the assessor that since there was a busy road going right by his cottage, his property was less desirable than his neighbours’. “I just kept talking and he finally agreed to lower my assessment.” Though Topp’s taxes rose, his appeal cut the amount by nearly$1,000.

No matter who you speak to, be prepared to explain why your home is overvalued. A home’s value is primarily determined by the neighbourhood it’s in. But there are special circumstances that assessors sometimes overlook, says Paul Cappa, a consultant at Cohen Highley, a law firm in London, Ont., that specializes in real estate. If your house is on the edge of a busy street or backs onto a railroad track or industrial property, it’s worth less than a house on a quiet tree-lined street just a few hundred metres away. The condition of your home is another factor. A house without a paved driveway is worth less than one with a paved drive.

But to prove your case you have to know what other homes are worth. The easiest way is to identify houses that you think are comparable to yours and that have recently been sold. Then ask the new owners what they paid. In some provinces you don’t even have to leave your living room to get detailed information. In Ontario, for instance, the Municipal Property Assessment Corp., which handles assessments, will let you compare your house to 24 others in the same neighbourhood at https://portal.mpac.ca/wps/portal/.

Cappa also advises you to check and see if there are any errors on your home’s assessment. Maybe the assessors thought your basement was finished even though it isn’t, or they thought you have two washrooms when you only have one. “They may not even have the lot size correct,” he says. “It’s little details like that which can ultimately make a difference.” R.G.

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