Please explain !
Thanks for clearing that up CDL.TO. My personal taxes have gone up 13% since 2007 so I and all these new office and condo owners must be subsidizing people such that their personal property tax bills have actually decreased in absolute dollar terms since 2007, no?
Taxes at the municipal level are done as a total amount to be collected for the whole of the city. Any increase is reported as a tax increase. Other forms of taxes levied by the province and federal government like income tax and sales tax are done as a percentage so growth in the economy or population nets more revenue. A growth in population or property value only nets more revenue for the city if they raise taxes (even if the mill rate is actually going down).
The macro level view is that new revenue, in this case of new taxes dollars coming from newly built properties (either residential or commercial properties), are a net gain to the city as long as the services provided (e.g. new sewers) are less of a cost than the new revenue. It's all at the margin, though, and while higher density helps keep taxes down, it'll never make up for inflation in the cost of services. It's a fact of life that taxes will go up by at least inflation or services will be cut.
No. That's the whole point, newly built properties do not raise any additional revenue for the city. As such, taxes need to go up by both inflation AND to account for growth in order to simply hold steady.
Let's say that in 2010 the revenue from property tax was $3,500,000,000. Now let's say that over the following year 10 billion dollars in new construction is completed, and they city announces a 0% tax hike. The revenue from property tax in 2011 would be... $3,500,000,000.
(NOTE: New property raises a little additional revenue, but only for the fiscal year that the new property was built.)
newly built properties do not raise any additional revenue for the city. [/SIZE]
Are you saying it's because revenues are comprised of an aggregate tax base which effects a floating rate that rises or falls as the pool of tax sources changes?
If this is the case then at least the option to increase revenues is available, or the cost burden on the taxpayer is reduced?
Ok got it, thanks.
However this should mean that if the tax on '500 King St' is X % of it's assessed value, then the following year, if a thousand new condo units are registered, as long as the tax collected on '500 King St' is still X % of it's assessed value, the city will see an overall rise in the taxes collected - without any apparent change to property taxes on 500 King St.