Sound city management means that sometimes there will be difficult decisions to be made, because we must ensure the well-being of the city not only for today, but for tomorrow as well.
Municipalities in Canada supply the vast majority of the public services we rely on every day, from clean water and waste collection, to playgrounds and programs for our children. It’s safe to say that local governments are the closest to its population. Yet they’re continually under financial strains from increasing responsibilities, rising costs and demands. It’s a common concern that municipalities will likely not be able to keep up with rising operating costs, which will also put pressure on infrastructure maintenance projects.
It’s important to understand that like many other municipalities, Saint-Lazare relies mainly on residential taxes for the operation of the town. Understandably, when residents receive their tax bill, it often creates questioning. That’s why I wanted to try to answer some of the questions I saw posted on social media. To me, it was clear reading some comments that a lot of people don’t necessarily understand the functioning of a town or municipal taxes, which can lead to misleading discussions. Hopefully this will answer most questions.
FAQ Saint-Lazare municipal taxes 2022
Question: Why did my taxes go up?
Answer: There are several factors that influence our municipal taxes.
[1.] Impact of zero increase tax rates
Although we were already experiencing an important increase in various costs in 2020, due to the pandemic and also in an effort to reduce the tax burden on citizens, like many other municipalities, Saint-Lazare elected officials decided not to increase municipal taxes last year. This was in part achieved by tight budgeting, using the provincial financial assistance intended to reduce the impacts of COVID and using the surplus. By doing so, it meant that in order to keep the same level of services as previous years and taking into account the increase in costs again this year, we had some catching up to do. The use of surpluses at that scale to balance the budget should be used with caution, and is not a good long term strategy.
The inflation rate for the province of Quebec, which has been between 5.1%-5.3% in the last months, has a direct impact on town budgets across the province. The cost of everything has gone up for everyone, including for municipalities. The inflation rate in the upcoming year is hard to predict due to the economic uncertainty, but rarely does the cost of things ever go down. It’s important to also know that we’re tied to certain contracts which can fluctuate with the inflation rate. As an example, our garbage contract which had to be renewed in November 2021, had a clause in it’s contract which indicated that the rate would go up when renewed according to the September 2021 CPI rate.
Quebec Consumer Price Index (CPI)
Source: Banque de données des statistiques officielles sur le Québec (https://bit.ly/3sNkQpT)
[3.] Irreducible expenses
Another important factor is the increase in irreducible expenses for 2022 which amounted to more than $XX million (operating costs, co-payments, waste removal and disposal, snow removal contract, quotes-parts, debt service, etc.) and that they represent XX% of total expenses. Every year, in preparing the budget, the Council must take these irreducible expenses into consideration. For the 2022 budget, the increase in the irreducible expenses had a major impact on the budget and affected furthermore our margin of flexibility.
|Example irreducible expenses||2021||2022|
|Sûreté du Québec||$4,050,400||$4,251,800|
|Metropolitan Regional Transportation Authority (ARTM)||$995,700||$1,028,600|
|Montréal Metropolitan Community (CMM)||$458,800||$476 400|
If the cost of operation and providing services to residents increase, it’s only logical that taxes should increase, since it’s our main way of financing these expenses. Unlike the other two levels of government, municipalities cannot run a deficit budget by law.
[4.] New valuation roll
Finally, 2022 is a new valuation roll (2022, 2023, 2024). We saw an increase in value for the average home of 20% in Saint-Lazare (values as of July 2020). Although the mill rate was adjusted to offset a big part of this increase, it’s still a factor that will impact us, especially if your valuation is above the average home.
Question: How are municipal taxes calculated?
Answer: Property taxes are based on the assessed value of your home and the projected revenue needed to offer city services and operation costs which is determined during the annual budget process. For Saint-Lazare, the MRC Vaudreuil-Soulanges is responsible for property assessments. You may have noticed an increase in the value of your home in your latest tax bill. Due to the increase in home values, the mill rate was adjusted from $0.6680 per $100 of evaluation to $0.5789 to compensate for the increases. The tax due is typically calculated by multiplying the assessed value of the property (in units of $100) by the tax rate (mill rate). To that, other charges may be added depending on the circumstances (water fee, residual materials fee, sectorial tax, etc.).
Question: Why did the taxes go down if the home is lower than the average price, if expenses have gone up?
Answer: The increase in the tax rate for 2022 is 3.9% for the average Saint-Lazare home (value of $467,600) and the average home went up 20% in value since the last valuation roll. If the home value is higher and increased at a higher rate than the average home, you should see a higher tax increase than the average. The opposite is true. The assumption that higher value homes should have a higher ability to pay than lower value homes (families tend to live in increasingly expensive homes as their income increases) is similar to the way our income tax system works in Canada. This helps ensure everyone can have a better quality of life, regardless of how much money they’re worth. Having said that, according to statcan.gc.ca, although property taxes are proportionate with respect to property values, they are regressive with respect to family income.
Question: Why did my home value go up?
Answer: The increase of average homes on the new valuation roll went up about 20% over a three year period. Please note that this for the average home valued at $467,600 and your home value may have gone up more or less than this depending on several factors. The values were based on the market conditions from July 2020 (18 months before the new valuation roll). The real estate market saw a dramatic increase in the last few years. The pandemic seemed to have been a factor in the hot real estate market which also created a housing shortage. Bidding wars during the last few years has been a common occurrence driving prices higher. So the increase in home value is based on the difference between the 2019, 2020, 2021 valuation roll and the 2022, 2023, 2004 valuation roll. That means we’re comparing the home valuations from July 2017 to the valuations established in July 2020.
Question: How was the home evaluations made if they didn’t come to visit my home?
Answer: To determine the value of a property, the real estate market conditions for the 18-month period prior to the coming into force of the assessment roll is taken into account (July 2020 in our case).
Property value is assessed on the basis of the selling price for property with similar features and comparing it to other similar property sold in the same neighborhood. Lot values are also assessed on the basis of the selling price for comparable vacant lots.
The Act respecting municipal taxation stipulates that the property assessment roll must also be updated to reflect changes made to property (such as change of ownership, new construction and renovations). This information is usually collected through an inspection and recorded in a file called the “property file”. The accuracy of this information must be verified at least once every nine years, as required by legislation.
In general, an appraiser’s visit will:
Follow up on an application for a building or renovation permit
Take place after you acquire your property
Be conducted to prepare the assessment roll (maintenance of inventory)
Question: So what does Saint-Lazare plan to do with the additional tax revenue/ taxes go up but what extra service did I get ?
Answer: Any taxes collected goes towards providing municipal services to citizens, infrastructure work, improvements and upgrades, roads, fire protection, snow removal, residual material collections, parks, leisure activities, events, special projects to improve the lives of citizens, etc. The increase in taxes also goes to compensate for the increase in costs to provide those services. As mentioned, it’s important to keep in mind that the increase in incompressible expenses alone went up by about 6% for 2022. It’s possible that you haven’t personally noticed additional services, but let me assure you that the tax revenues go back towards the operation of the town and the citizens of Saint-Lazare. Unlike other levels of government and most businesses, municipalities aren’t allowed to run deficits to cover operating expenses.
Question: What if I don’t agree with the evaluation of my home?
Answer: You can request a revision of your evaluation before May 1st of the first year of the triennial role (April 30, 2022 deadline). Note that there’s a fee for the review and it doesn’t guarantee that your request will be approved. See more here https://mrcvs.ca/en/municipalities/property-assessment/
Question: The city is just trying to get in on the action (high real estate market) and they’re trying to take advantage of the citizens
Answer: The process of drawing up and updating the assessment roll is governed by provincial regulations, such as the Act respecting municipal taxation and the Manuel d’évaluation foncière du Québec. In addition, the property assessment roll which is under the responsibility of the MRC, is compiled by an appraiser who is a member of the Ordre des évaluateurs agréés du Québec, whose actions are governed by rigorous standards of professional practice and a code of ethics. The evaluators compile the property assessment roll, independently of any political or administrative interference. The municipal taxation system is a process that is governed by laws and taxes collected are to supply the public the services they rely on every day.
Question: Who does the evaluations?
Answer: The MRC Vaudreuil-Soulanges is responsible for property assessment of Saint-Lazare and for 19 of its 23 municipalities (all except Île-Perrot, Pincourt, Vaudreuil-Dorion, and Île-Cadieux).
Question: Why would one house value would appreciate more than another?
Answer: Home values across the city don’t change at the same rate. Property values are assessed on the basis of the selling price for property with similar features and comparing it to other similar property sold in the same neighborhood. Other factors may influence property values, such as renovations.
Question : What are sectoral taxes?
Answer: Sectoral taxes are special taxes resulting from the charges that affect a specific property in a precise sector of town. It applies in the sector where the taxpayers receive these services and is not applied town wide. As an example, it can be a special tax to finance new paving for your street.
Question : Regarding the land transfer tax (welcome tax). What hasn’t been discussed is the massive increase in the land transfer tax or welcome tax. It has increased to 3% on all amounts over $500k creating a huge increase for new buyers and people moving within Saint-Lazare. A hidden tax grab!
Answer: The land transfer fee or “welcome tax” which came into effect in 1992 in Quebec, is charged to anyone buying an immovable (a home, building or land) and must be paid to the municipality. This tax, which is applied across Québec, is calculated in accordance with the Act respecting municipal taxation. The goal of this tax is to give municipalities an additional source of revenues. The welcome tax is calculated using the higher of two values: a property’s municipal assessment or its purchase price. From this base amount, the taxation rate is then applied by brackets. Knowing that it’s becoming more difficult to finance municipal services and the need to diversify revenue, Saint-Lazare recently changed it’s way of calculating the welcome tax. A careful analysis was done by our finance department to compare towns in our region. We were able to observe that we were not comparable to other towns as we were charging less in the highest brackets than some of our neighbors. Since 2017, municipalities have the power to set a higher amount than 1.5% (to a maximum of 3%) on any bracket over $500,000. Saint-Lazare took advantage of this right as many other municipalities in Quebec had already done. This is hardly a tax grab, but rather a way to finance town services for residents. It’s also important to note that these decisions are done in full transparency and adopted during public council meetings.
Question: What’s the difference between the municipal value of my home on my tax bill and the market value of my home?
Answer: Municipal valuation and market value of a property are not the same. The municipal property value assessment, while done by a professional in the field, is not done accurately for each individual home. It is only used to approximate the value of the properties and not to obtain the true market price of each property. The value is calculated as a block of comparable homes, i.e. the price of your home is estimated based on similar properties nearby.
The municipal assessment is valid as of July 1, 18 months before the city’s assessment roll comes into effect, and is only redone every 3 years. It does not follow the instabilities and conditions of the current real estate market, since it is set for a period of several months. It is therefore not representative of the price you could obtain for your property if you decided to sell it.
The market value fluctuates constantly, depending on supply and demand in the real estate market. It may therefore be above or below the value established by the municipal assessment. Typically, the market value of a home is higher than the municipal value reported.
Municipal tax increases around our MRC for 2022
Here are the tax increases for 2022 for an average home in the region for municipalities who are part of the CMM: Saint-Lazare (+3.9%), Vaudreuil-Dorion (+4.3%), Ile Perrot (0,46 %), Notre-Dame de l’Ile Perrot (+5%), Hudson (+2.9%), Pincourt (+6.02%), Les Cèdres (+1.18%).