Tax bills might be a shock for some
3.3% average hike belies vast differences across 400,000 residential properties
Mario Caluori has spent a lot of time analyzing the municipal tax bills for his semi-detached, single-family home on 2nd Ave. in St-Michel.
In the past, as his property’s value steadily increased as speculators bought, renovated and re-sold houses in his neighbourhood, Montreal compensated by decreasing tax rates. His bills went up by only $30 to $60 a year.
That changed in 2017, when his taxes jumped by $169 or 5.4 per cent — more than triple the average hike across Montreal.
That’s one of the reasons Caluori — 60 years old, unemployed and living off his savings — voted for Mayor Valérie Plante in November. “I have the Projet Montréal brochure here. It says, ‘Less taxes for families,’ ” Caluori said Friday.
Well, he just got his tax bill and his 2018 increase will be $264 or 8.3 per cent — more than twice the average hike in the city.
“We feel cheated,” said Caluori, who owes Montreal $3,454 in taxes this year.
“This is a heavy burden for people on low income who do not have cost-of-living increases built into their revenue.”
Montreal sent out tax bills this week, detailing for the first time exactly how taxpayers will be affected by a controversial tax hike Plante imposed in her first budget.
This weekend, as taxpayers take a closer look, they might be surprised by what they find.
That’s because the figures bandied about in news articles, press releases and politician sound bites can be misleading.
The average tax hike for residential homeowners is 3.3 per cent, an increase for which Plante has taken heat because she campaigned on a promise to raise taxes by no more than the rate of inflation (about two per cent).
That 3.3 per cent takes into account average increases on three lines of municipal tax bills, all of which are calculated based on property values:
“General tax,” the biggest part of the tax bill, accounts for 1.9 per cent of the increase.
“Borough tax,” used to finance local services, accounts for 0.3 per cent
“Special tax concerning water service,” accounts for 1.1 per cent.
The budget also highlighted the average tax hike by borough — between 0.7 per cent (LaSalle) and 5.6 per cent (Rosemont–La Petite-Patrie).
But, as Caluori can attest, the 3.3 per cent overall average belies vast differences across the 400,000 residential properties on Montreal’s tax roll.
And borough averages don’t tell the entire story either, as some areas saw higher tax increases, others lower.
As for the water tax, the real increase in water tax is bigger than the 1.1 per cent figure would lead you to believe. The 1.1 per cent refers to the impact the water tax increase will have on the overall municipal tax bill.
In fact, Montrealers will pay 7.4 per cent more in water taxes.
On 2017 bills, the rate was 0.0945 per $100 of assessed evaluation. That means that in 2017, for a house the city was valued at $500,000, the water tax amounted to $472.50.
In 2018, the water tax rate was hiked by 0.1015 per $100 valuation. For a house valued at $500,000, the water tax is $507.50 — 7.4 per cent more than in 2017.
IMPACT CAMOUFLAGED
Average increases also camouflage the impact of the rise in property values as assessed in the city ’s valuation roll.
A new roll came into effect in 2017 covering the years 2017, 2018 and 2019. The average Montreal home saw its valuation increase by 6.2 per cent.
Some saw bigger increases, including Rosemont–La Petite-Patrie (9.3 per cent) and Villeray– Saint-Michel–Parc-Extension (8.3 per cent).
For Caluori’s house, the valuation increased by 15 per cent or $60,000. The city divides valuation increases over three years: For the purposes of his tax bill, the valuation will increase by five per cent or $20,000 in 2017, 2018 and 2019.
Still, this year’s $20,000 increase helps explain why his tax bill went up more than the average in 2018: He had to contend with Plante’s tax increase as well as the valuation growth.
And that’s why in 2019, even if the Plante administration imposes a tax hike in line with inflation of about two per cent, he estimates his bill will increase by at least seven per cent.
Caluori said the valuation increases don’t benefit him in the short term. “If you sell, you go somewhere else — it’s the same thing unless you want to live in a tent.”
He has spent the past few days going door to door talking to his neighbours, all of whom have seen similar valuation and tax increases. He said most voted for Plante and now feel betrayed.
He scoffs when asked if Montreal city services have improved in recent years: “No.”
Caluori has lived in his home since his parents bought it in 1962.
“I was sure I would never leave, now I’m not so sure anymore,” he said, adding that unless things change, he may investigate a move to the South Shore in search of more reasonable taxes.
Montreal will spend $5.5 billion in 2018, $271 million more than last year — a 5.2 per cent increase.
Taxes will bring in 69 per cent of the $5.5 billion the city needs.
Plante has said the lower-taxes-for-families pledge will be fulfilled when she announces a plan to give families buying their first homes a discount on their welcome tax.
And she said the tax increase was needed — the main tax hike to meet Montreal’s “general needs” and the water tax hike to accelerate repairs of the city’s water infrastructure.
But Caluori said Montreal should cut waste instead of targeting taxpayers to pay for constant growth in spending.
“I’m on low fixed income and this is St-Michel, but they’re charging taxes here like it’s Town of Mount Royal,” Caluori said. “I plan my life in such a way that I have enough to live, but this throws a monkey wrench” into the works.
I’m on low fixed income and this is St-Michel, but they’re charging taxes here like it’s Town of Mount Royal.