Property Taxes – Everything You Need to Know

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Property taxes

** Please note we are not tax experts. the information in this blog serves to inform and highlight information homeowners might not be aware of.

We have compiled this information from: https://www.saskatoon.ca/services-residents/property-tax-assessments/property-tax. **

Property taxes: most people have heard about them – but not everyone actually knows about. If you have heard about them, but have never owned a house, here is what you need to know.

Municipalities (cities, towns, villages, resort villages and rural municipalities) raise most of their revenue through property taxes.

Your property taxes were calculated using the ad valorem basis of taxation meaning that your property taxes increase proportionately with the value of your property. Please note – properties taxes usually increase over the years. Be sure you calculate this into your budget before you purchase your property.

 

Want to know more:

 

1) The municipal council adopts a budget outlining expected expenditures and revenues, including the amount to be generated by property taxation.

 

The council establishes the municipal tax rate (or uniform mill rate) expressed as a mill, by dividing the amount of taxation revenue it requires by the total taxable assessment, and multiplying that number by 1,000.

 

For example, a municipality with a total taxable assessment of $34,200,000 requires property tax revenue of $478,800. The tax rate is $478,800 / $34,200,000 x 1,000 = 14.0 mills.

 

The municipal portion of your property tax is calculated by multiplying your taxable assessment times the tax rate, and dividing that number by 1,000.

For example, if your taxable assessment is $81,700, the municipal portion of your property tax will be $81,700 x 14.0 / 1000 = $1,144.

(The above paragraph & is an example taken from The Saskatchewan Government website.)

 

2) There is a Tax Minimum

 

Everybody needs to pay for their property taxes and there may be a bylaw to establish a minimum taxation amount for homes that are lower assessed properties. Usually, the minimum is a value amount but it can also be expressed in a formula.

 

This tax policy will reduce the uniform mill rate which will benefit properties with higher assessed values.

 

3) There is a Base Tax

 

Base taxes are applied to properties within one more property class. Base taxes on homes are like those for personal income – they are set by a specific amount. A base tax usually lowers the tax rate reducing the difference in property taxes between lower and higher assessed properties.

 

Your taxes are determined by adding the base tax to your ad valorem tax calculation we mentioned above (Section 1). 

 

4) There are “special taxes”

If your city or town needs to raise revenue for specific services or for another purpose, they can and may pass what is called a special tax bylaw. In this case – a public notice would be required and the city or town you live in must complete their “specific services” within that taxation year. 

Keep things like this in mind if you are moving into an older neighbourhood where upgrades to sewage or water might be needed. It is also great to keep this in mind for communities that are expanding an overpass may be put into place, or a retaining wall. 

Keep all of these things in mind when you purchase your home as taxes can affect your home budget. 

As always, if you need help buying or selling your home, please contact Gregg Bamford or Ryan Bamford.