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Tax-bill jump riles homeowner

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A family of five got a nasty shock from Winnipeg’s city hall this festive season. Starting in the new year, their monthly Tax Installment Payment Plan (TIPP) bill is going up 31 per cent.

“They sent us a letter a week or so ago — our TIPP went from $169 to $221,” said Ken Thoroski, who lives in St. Vital.

“I thought there might be some kind of mistake.”

The city says it’s no mistake — the increase is for their own good.
“Given the recent increase in assessed value for many homes in the city, the assessment and taxation department is anticipating an increase in taxes for some homeowners,” a 311 operator told Thoroski in an email.

While any increase in property taxes won’t be decided until spring when city council sets the municipal budget, the TIPP program isn’t waiting.
“In order to diminish the impact of a possible tax increase, the department is estimating your possible 2010 taxes and setting your monthly TIPP payment accordingly” starting Jan. 1. Once the mill rate is set in the spring, the department will know exactly what Thoroski’s taxes will be for 2010 and adjust his monthly TIPP up or down as necessary, the city said.

“It’s wrong,” Thoroski said. “They’re hitting you as hard as they can up front.”

The TIPP program allows property and business owners to make consecutive monthly payments for taxes rather than a single annual payment.

It starts on Jan. 1 of each year and payments are made on the first banking day of each month by automatic withdrawal from an account with chequing privileges at a financial institution.

Thoroski said upping his TIPP payment by so much before the new rate is set isn’t much of a privilege.

“You’re going to pay for 12 months and they hit you hard up front so they’re way ahead and pay you back later,” Thoroski said.

“It’s putting more money in their coffers,” continued the married father of three.

No one is forced to be on the TIPP program, which was designed to help people budget their property and school taxes, said the city’s head of assessment and taxation.

“If they have a real concern with how they’re being requested to make payments when taxes aren’t due, then send us a letter asking us to remove them from TIPP,” Nelson Karpa said. The city will then send the tax bill in the spring and the family can pay it at the end of June when the full amount is due, he said.

Still, the increase in property taxes riles Thoroski, who says the city won’t address his complaints about the sidewalk flooding on his street and noisy, over-lit service stations near his home.

Karpa said an increase in property taxes follows the 2008 reassessment, in which the market value of some homes in Winnipeg increased by as much as 100 per cent from five years earlier.

“There was a pretty dramatic increase in the value of real estate,” Karpa said. The average property value increased 67 per cent, he said.

“We simply report on what the market has done.”

Homeowners whose assessment increase is above the city average will likely see their property taxes increase.

The market value of Thoroski’s home increased 78 per cent from 2003 to 2008, according to the city’s property assessment website.

If city council succeeds in freezing property taxes again, homeowners with assessment increases below 67 per cent could see their property taxes drop.

http://www.winnipegfreepress.com/local/tax-bill-jump-riles-homeowner-79968637.html

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Property Tax Controversy

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The Saskatchewan government is contemplating a delay in fulfilling two changes promised in last year’s budget, both of which will impact property taxes. One, the promise to shift education funding away from property taxes and onto provincial coffers, the second, to increase municipal revenue sharing. The former should be implemented immediately; the latter should be put on hold.

Municipal revenue sharing and school property taxes were both on the front burner of Saskatchewan politics for many years, though furor over property taxes was always greater. While British Columbia and the Atlantic provinces did not use municipal property taxes to pay for schools whatsoever, Saskatchewan relied on them more heavily than anywhere else in Canada. Last year’s budget was a giant leap forward as increased dollars from the province brought its share from 51 up to 63 per cent of total K-12 education funding.

But that wasn’t all. The province also took control of mill rates for school property taxes across the province, ensuring its increased funding would not simply lead to more spending by school boards and, therefore, a tax increase. Provincial funding was to increase even further in 2010-11, meaning general revenues would pay for 66 per cent of the total, leaving the rest to school property taxes. It is this further change that is now in jeopardy.

It’s a similar story for municipalities, who are now receiving record funding from the province. Last year’s budget dedicated 0.9 of the 5 per cent PST towards municipalities, scheduled to rise to a full 1 point in 2010. This meant the province, which gave $135 million to municipalities in fiscal 2008, would grant $167 million next year and would give $220 million in 2010. Again, that additional bump might not take place.

There are two main differences between municipal revenue sharing and school funding that make the latter the best choice for budget dollars. With the province taking over both the property tax and general revenue sides of school funding, lowering general revenues will have one of two consequences: less money for schools, or higher school mill rates to make up the shortfall. Bye-bye property tax reduction.

On the face of it, giving less money to municipalities would mean higher property taxes as well. But in an ironic twist, less money for municipalities might be good for taxpayers overall.

Like a fish that grows to the size of its environment, municipalities have simply taxed and spent more due to provincial revenue sharing. Consider that last year, even with record transfers from the province and higher assessment values, mill rates failed to drop in Regina and even rose by 2.87 per cent in Saskatoon. Ironically, the extra $7.7 million the City of Regina received from the province for revenue sharing was precisely equal to the amount given for salary increases at City Hall.

These dollars exclude the millions more given to municipalities each year through annual capital grants and special ‘stimulus’ grants. Projects driven by the deficit-spending federal government have also meant additional provincial funds of $25 million for Saskatoon and $20 million for Regina. This in and of itself is almost enough to offset the $53 million bump in funding that the province is reconsidering for the upcoming budget.

While it’s true that balancing the budget next year will take some difficult decisions, some are easier than others. In the battle of school funding vs. municipal revenue sharing, schools deserve to win hands down. Municipalities that want to overspend should have to justify their tax increases to citizens and not place the blame on another level of government.

http://canadafreepress.com/index.php/article/17516

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Transfer tax slammed

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Realtors call for exemptions, reductions

Winnipeg’s realtors have asked the province to consider exemptions and reductions to the land transfer tax, which the agents say is an impediment to some would-be homebuyers.

The provincial government keeps a registry of land titles and requires people to pay to transfer the title when they buy a property. That tax can run into the thousands of dollars. The Winnipeg Realtors Association says that can cause some prospective homebuyers to delay an entry into the housing market as they save up enough for the land transfer tax, which is paid up front as part of the closing costs of a sale.

“We feel it’s a very regressive, negative tax,” said Don Cook, chair of civic and legislative affairs for the Winnipeg Realtors Association. “The government’s really getting a good take on it right now.”

A spokeswoman for provincial Finance Minister Greg Selinger said the government has projected it will bring in $43.6 million from the tax this fiscal year, which ends March 31. The cost of administering the land transfers is about 1% of that revenue, she said, meaning about 99% of it goes into the government’s general coffers.

Suggestions

Cook said the realtors met with Selinger on Feb. 18 with a list of suggestions for changes, including an exemption for first-time buyers and affordable housing program participants. Ontario and B.C. exempt first-time home buyers, while Saskatchewan and Alberta have no land transfer tax at all, the Winnipeg Realtors Association said.

Cook said the realtors also suggested changing the rates in Manitoba.

Currently, Manitobans pay nothing on the first $30,000 of sale price, 0.5% from $30,000 to $90,000, 1% from $90,000 to $150,000, 1.5% from $150,000 to $200,000, and 2% on the portion above $200,000.

The realtors have suggested charging 0.5% up to $100,000, 1% up to $200,000, 1.5% up to $500,000 and a cap at the half-million mark. “We’re hopeful it will happen,” Cook said.

However, Selinger’s spokeswoman said the NDP government is “prioritizing initiatives that will stimulate our economy” and focusing on tax measures contained in last fall’s throne speech. The speech made no mention of land transfer tax.

She said the government has instead eased the property tax burden by eliminating the education support levy and increasing the education property tax credit over the past few years.

http://www.winnipegsun.com/news/winnipeg/2009/03/09/8677276-sun.html

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