Catherine Farley – Toronto Star

An exclusive analysis of real estate data by the Toronto Star  shows that in some areas of the GTA house values have soared over 20%, while homes in other areas have stagnated since they were last assessed in 2008.

The biggest value changes were in condominiums and bungalows in Toronto, which were up more than 25% in some areas. In other areas, the value of some homes dropped.

Using data never before made public, the Star compared the price of homes sold in 2010 with their assessed value, as determined by the Municipal Property Assessment Corp. (MPAC) in 2008. The analysis shows that on average Toronto homes rose 15% above their assessed value, while those in the rest of the GTA rose an average of 13%.

The analysis also examined value changes by type of home — including condos, condo townhomes, detached houses, semi-detached houses and bungalows — and revealed which housing types fared better than others.

The numbers were provided by the MPAC, which monitors property sales across the province. Next year, MPAC will use recent sales of comparable homes in your area to reset the market value of your home. Municipalities, in turn, will base the property taxes you pay from 2013 to 2016 on these new values. Here’s a preview of where assessments could be heading.

Hot downtown condos: The downtown Toronto condo building boom has produced attractive double- digit returns for property owners. The six areas from South Etobicoke in the West to The Beach in the East contain one third of Toronto’s condominium units, a third of the resales and half the new condo sales in the city.

Average value gain in condos in these areas: South Etobicoke (TREB area W6) 20%, Parkdale-High Park (W1) 18%, Downtown West (C1) 22%, Downtown East (C8) 25%, Riverdale-Leslieville (E1) 22%, The Beach (E2) 18%.

Bungalow boom: The humble post-war bungalow has enjoyed some of the highest gains, particularly in mid- and North Toronto and up the Yonge St corridor. With their typically larger lots, smaller single-storey homes have been ripe for redevelopment with a second storey, or teardown and replacement with luxury ranchers.

The resale of redeveloped lots has pushed up the value of unrenovated bungalows in some areas to more than $800,000, mostly because of their land value. But this also means, come the next round of property assessments, homeowners will be saddled with property taxes reflecting these new values.

Areas with average increases of more than 20% since last assessed: Mid-Toronto (C9, C10, C11, C12), The Beach (E2), Thornhill (N1), Markham (N10, N11), Richmond Hill (N3).

On the waterfront: For the pleasure of living on the lake, homeowners in the GTA typically pay double. The average assessed value of detached waterfront properties in Toronto is $1.07 million, compared with $441,099 for an average home. West of the city, the toniest lakefront properties are in Oakville, where they are valued at the breezy average of $3.5 million — over six times a typical home in the area. A major reason for their high value is their generous one- to two-acre lots. Condos overlooking the lake also pay a premium.

Adjacent waterfronts in Mississauga and Burlington neighbourhoods also carry high premiums, with Lorne Park at $2.8 million (five times the average) and Burlington at $1.5 million (four times). East of Toronto, Pickering and Ajax detached waterfront properties can cost up to double, but farther east, the premium falls off.

In terms of holding their value, waterfront properties were less than stellar in 2010, with an average gain of 10% and some of the high-end properties selling at less than their assessed value. The biggest gains were in Burlington and north on Lake Simcoe.

Gainers: The biggest gains were in downtown Toronto from The Beach to Etobicoke. Condos were up more than 20%, and semis more than18% in most areas.

Average: Detached homes in Toronto had the lowest average gain of all property types at 12%, but fared better in the 905 with 14%.

Losers: In 24 of the 86 GTA areas, prices increased 9% or less, mainly in the northwest and northeast of Toronto, and the outer GTA.

Tax implications: The numbers were provided by the Municipal Property Assessment Corp., which monitors property sales across the province. Next year, MPAC will use recent sales of comparable homes in your area to reset the market value of your home. Municipalities, in turn, will base the property taxes you pay from 2013 to 2016 on these new values. Here’s a preview of where assessments are heading.

Assessments and property taxes Q & A

Q: Will my taxes increase by the same%age as my assessment increases?

A: No. What matters is how much your assessment goes up compared to other properties in your municipality. Think of the municipal average as a baseline. If your property assessment is above it, your taxes will go up. Below it, your taxes go down. Any increase or decrease correlates to how much above or below the average you are.

Q: What is my current value assessment?

A: The price that your home would likely have sold in January 2008, as determined by the Municipal Property Assessment Corp. (MPAC) in 2008. It reflects any subsequent adjustments made to the price after, for instance, a request for reconsideration initiated by the home-owner.

Q: When will my home be reassessed?

A: The next round of assessments is set for 2012. Your new assessment will be determined by MPAC as the price your home would likely sell for in January 2012.

Q: If my house price drops in 2012, will my assessment go down?

A: Not until the next round of assessments four years later, in 2016, assuming its market value remains lower than its 2012 assessment.

Q: How does the city determine my tax increase or decrease?

A: At budget time, your municipality figures out how much it needs to raise from property taxes, and divides that up among homeowners according to MPAC’s assessments. Owners of expensive homes pay a larger share of municipal taxes. If your assessment goes up, the increase will be spread over four tax years, 2013 to 2016. If your assessment goes down, the full amount will apply in 2013 and your taxes may also drop.

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Contact the Jeffrey Team for more information – 416-388-1960

Laurin & Natalie Jeffrey are Toronto Realtors with Century 21 Regal Realty.
They did not write these articles, they just reproduce them here for people
who are interested in Toronto real estate. They do not work for any builders.
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