New role for Municipal Taxes

Municipal taxes are the main source of income to finance a city’s activities. The amount to pay is based on the property’s value. The imposition for municipal taxes represents the value of the building. This value, decided based on the property assessment, does not define the real value of the property on the market and is only important for the tax calculation.

The higher the property value is according to the assessment, the more tax you will have to pay. In this article, we will look at how the new three-year property roll decided last September will have consequences on municipal taxes for 2023, 2024 and 2025.

We will also talk about the contests and incomprehension related to Montreal’s increase of property assessment and the available options for owners who disagree with their property assessment.

Municipal Taxes’ role and its calculation

Certain taxes, including the general property tax, are imposed at various rates. The tax rate is not the same, depending on the building category, whether its category is residual (fewer than 5 apartments), residential (more than 6 buildings), non-residential or vacant lot. Thus, different tax rates are applied according to the brackets of the value of the building, by bracket of $100.

The New Property Role: The Consequences

A new property role includes different information that helps identify and describe the utilization and the physical features of each building. Therefore, this new 3-year property roll, adopted in September 2022, reflects the market on July 1, 2021. This is used as a base for the tax calculations for 2023, 2024 and 2025.

Due to the active Montreal real estate market during the pandemic (2020–2021), property values have continued their ascension and taxes have increased exponentially. The new property roll in Montreal has increased of over 32% in comparison to previous property roll. A burden supported by taxpayers who are obligated to pay these taxes completely in 2 payments, not to have penalties.

If we add home improvement or construction projects to be done on a property, the evaluation might be higher. Therefore, the amount will increase as well, independently of the property’s true value.


Contestations and Incomprehension on the New Property Roll

This high increase of property assessments in 2022 has caused anger for good reason: owners who are going through a property assessment increase higher than average will see their tax notice increase significantly as well. Paired with an almost 8% inflation rate, a stable augmentation rate of the property roll in the current tax system seems unrealistic: the impact will be felt on Montreal owners. Many voices have raised to oppose to those increases through a petition that proposes that the new budget should be based on the 2020 roll instead of the one in force this year.

If you disagree with your property assessment, please be aware that you have the possibility to request an administrative revision. The deadline is April 30, 2023. Please keep in mind that if you contest your assessment, it might increase, decrease, or stay the same.

Moreover, this review request has a non-neutral cost that varies based on the building value listed at the time of the contestation. For example, expect to pay $300 if the value of your property is listed between $500.00 and $2,000,000. Please visit City of Montreal’s website.

In addition, the outdated tax payment system is still in force. A cutthroat for property owners. With such increase, it is not normal to have to pay this amount in 2 payments only. Although the city is thinking of the possibility of spreading out the tax hike on three years to avoid a huge financial shock to property owners and taxpayers.

Like Quebec City, it is time to open the payment system to a monthly or tri-monthly basis to relieve property owners of the many charges they have.

Do you wish to talk about the impact the new property roll has on your property? Do not hesitate to contact me, it will be my pleasure to help and assist you! Call me on 514-975-1133.

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