# How to appeal Municipal property tax assessment Notice?



## jargey3000 (Jan 25, 2011)

I'm thinking of appealing my latest Property Assessment (on which my city taxes will be based). I don't have any experience at this and i'm just wondering from others that might - what is the best way to approach this?
They ask on the appeal form" "I hereby appeal to the Assessment review Court against the assessment of the above noted property on the following grounds:"
Any one have any experience with this? What are the best "grounds" to approach it on? Any tips, suggestions, advice? I don 't plan on hiring any professionals to represent me - just do it myself? Does the city usually give anyone a break - or what? Thanks.


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## Just a Guy (Mar 27, 2012)

I do this all the time. Each city is a little different. Some cities, you complain, they cut the assessed value to get you to go away, other cities argue.

The best way is to find the current selling price of similar properties (about a 30 second search for a realtor). If the prices are lower, you appeal based on the appraised value is too high. Since I buy a lot of properties, my realtor will do the search if I ask. 

I usually buy my rental properties well below market value, so I usually appeal in the year of purchase. My arguement is usually "I bought it for this price, so that's the value". They usually lower it. 

The following years, I look for excessive increases (since they try to bump them back up quickly). If the "value" has increased by too much (say 10%) I'll appeal based on the fact that real estate hasn't increased by 10% in a year. 

Other things to look at are building condition, and other things...but that more applies to commercial real estate.

My final arguement usually is "if you really think it's worth that, please send me a cheque and I'll send you the title", but I've only used that once in taking to the assessor. 

Don't hire a professional, they won't get you the best reduction. I've literally seen them go before the appeal board and say "same old, same old" and they get a minor reduction. 

It rarely goes before the appeal board, they make you an offer to settle.

I don't think I've ever lost an appeal, I usually get the assessment reduced at least a bit, but some cities are much harder to get to lower than others. They may send out an assessor, the threat is they may think it's worth more due to unknown improvements...

Of course, I only appeal properties I know will win, and I don't appeal every year.


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## jargey3000 (Jan 25, 2011)

Thanks Justaguy. That's good information. Appreciated.


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## kcowan (Jul 1, 2010)

My brother appealed every year because he was living in a tear-down. Every years they eventually gave him a reduction although the last year was here take $10k and go away. We made friends with the local assessor (Markham) and he classified our addition of an enclosed spa room as a verandah. That saved us $1000s.


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## Just a Guy (Mar 27, 2012)

Remember, saving 1000's in assessed value doesn't translate into saving 1000's on your taxes though. You'll only save a couple hundred dollars at most.


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## AMABILE (Apr 3, 2009)

in ontario, you can access MPAC's "aboutmyproperty"

https://www.mpac.ca/ProductsServices/AMP/AboutMyProperty_FAQ


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## jargey3000 (Jan 25, 2011)

thanks all. I guess i'm really looking for some "coaching" on how to go about this (for the first time). i guess saying "gee, I think my assessment is too high, how about lowering it" is prob. not the best approach :biggrin: I realize each case will be different, but what's a good way to get the ball rolling???


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## Just a Guy (Mar 27, 2012)

The best way is to find out if your assessment is actually high or not. Find out what a similar property is selling for in the area. You also need to know how the city calculates it's assessment, not all use market based assessment. Remember, you pay a portion based on how your property compares to similar ones. If a lower assessed property has improvements over yours (two car garage over a one, bigger yard, cedar shingles over asphalt, etc) then you may have a case.

Next, you have to figure out how much it's over by...saving $10,000 on an assessed value usually translates to a low savings on your taxes (as in less than $50), so figure out if it's even worth it. A few years back I bought 5 places well below market value. When I appealed, I saved $160k or more in assessed value on all of them combined, even still it probably only saved me $800-1000 in taxes. Well worth my time, but that was 5 appeals (one should also look at that sets the bar going forward, so I suppose my taxes in the following year were also lower, so the savings were even more). 

Remember though, I had to file 5 appeals, deal with 5 different assessors, had to get my comparative specs on 5 different properties, and (should it have gone to the appeals board, appear, or have my representatives appear at 5 hearings. If they are in the same city, they will usually combine all the cases into one hearing). There was time involved, and time costs money. 

There was one city I remember who assessed every property well below market value (let's say 20% below market), but kept everyone relative. For years, you couldn't appeal your taxes. During the boom years, it worked perfectly...then one year there was a major correction, and their "projected increase" was still in line with the boom years...

That year, the city was hit with a record number of appeals, however the savings were relatively minor, as the entire city was basically reassessed. Remember, municipal taxes are based on your portion of the total collected. If everyone is corrected down the same, your taxes remain the same, as the city still collects the same total overall.

Here is an oversimplified explaination of how municipal taxes work: 

If the city wants to collect $100k and there are 10 houses, each worth $100k, each place is expected to pay $10k. If there was a house worth $500k, and 9 more worth 100k each (total assessed value is $500k + 9 x $100k 9r $1400k), the $500k house would be expected to pay 500/1400x100k or $35,715 and the 100k houses would pay $7,142 (100/1400 x 100k) each. 9 x $7,142 plus $35,715 come pretty close to $100k total. 

Now, if you owned the 500k house, but found out it was really only worth $400k (let's say the 100k houses were priced right) then your ratio would change. (Now the total assessed value is 1300k and the house is worth 400k) his taxes would decrease to $30,770 and the other houses would increase to $7692 since the city still needs to collect it's 100k. 

With such a small number of houses, the tax swing looks huge, with a city full of hundreds of thousands of homes, the swing becomes a rounding error.


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## jargey3000 (Jan 25, 2011)

thanks again justaguy. I appreciate your taking the time to comment.


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