June 30 is an important day for those Winnipeg property owners who are not on the Tax Installment Payment Program (TIPP). On that day, they must pay their 2014 school and municipal taxes or face a late penalty fee.
Since 2014 is the first year based on estimated April 1, 2012, property values, some ratepayers may believe their property taxes are going up beyond the budgeted increase for this year. Not so fast. While it is true your assessed value went up from 2010 to 2012 (reassessment cycle is every two years), the city adjusts the mill rate every year to determine what you must pay. Assuming property values have gone up, as they have been doing in the last number of reassessments, the mill rate is always adjusted lower to factor in the increase in the assessment base.
If your property’s assessed value increased more than the average increase in assessed value, you may, in fact, pay a little more than the previous year when you exclude any increase coming from the annual city and school division budgets. Conversely, you could experience a slight decrease if your property’s value did not rise as fast as the average home assessed value increase.
A Winnipeg homeowner’s property tax bill is calculated by multiplying the property assessment value by the mill rate, which is a rate set by Winnipeg property assessment officials. Essentially, when property assessments rise, the civic officials recalibrate the mill or tax rate to ensure that the city still receives the same amount of necessary revenue to run and operate services.
Here is how the city of Winnipeg explains it:
“Property value increases during General Assessment do not necessarily mean increases in property taxes. A General Assessment is not a revenue-generating process — it is simply a mechanism that determines up to date market values to ensure the tax burden is shared fairly. Remember that the percentage change in your assessed value in a general assessment year does not result in an equivalent change in your property taxes. The total amount of taxes collected by the City of Winnipeg depends on the civic budget — not the total value of assessment.”
Another important point to understand is that your final tax bill is calculated based on a portion of your new assessed value. For single-family homes, property owners pay taxes based on 45 per cent of the assessed value. So you take 45 per cent of your assessed value and multiply it by the mill rate to arrive at what your total bill will be.
There are two different mill rates your total property tax bill is based on. For 2014, the municipal mill rate is 0.013372. If your house is assessed at $300,000, you take 45 per cent of that amount which is $135,000 and then multiply it by the municipal mill rate to get $1,805.22. Now you also need to calculate your school taxes. If you your home is in St. Vital, the Louis Riel School Division mill rate is applicable. It works out to $1,675.21 after multiplying $135,000 by 0.012409.
The city also adds a frontage levy on your property tax bill. The current rate is $3.75 a lineal foot. Using the above example of a $300,000 assessed home in St. Vital with a lot frontage of 50 feet, your frontage levy charge on your bill will be $187.50. Total taxes due in this case end up being $3,667.93.
There’s one more step necessary to get to your net property taxes and the balance owing to the city of Winnipeg. There is a provincial tax credit of $700 that you subtract from the total giving you a final net property tax of $2,967.93. If you are a senior, you are eligible for a greater provincial property tax credit, but you need to apply for the school tax rebate. For more information, call the Manitoba Tax Assistance Office at 204-945-7555.