Introduction
In this article, we will explore how property taxes are calculated in Port Moody. We will delve into the different components of property tax allocation and provide an in-depth explanation of the assessment process. By the end of this article, you will have a comprehensive understanding of how your property taxes are calculated and the factors that can affect their amount.
How is Your Tax Money Spent?
Approximately half of the property taxes collected by the city are used to fund essential public services. These services include the police and fire departments, libraries, road repairs, streetlights, parks, pools, and various other amenities. The remaining half of the property taxes is allocated to regional and provincial agencies, such as Metro Vancouver, TransLink, BC Assessment, the Municipal Finance Authority, and the Ministry of Finance. These agencies use the funds to support schools and regional initiatives.
Determining the Tax Rate
The tax rate is established based on the annual budget and the five-year financial plan approved by the City Council. The budget determines the level of service provided to residents each year. Once all expenses are accounted for, the estimated city revenues are subtracted from this amount. The resulting figure represents the total property taxes needed to balance the budget for the year.
Calculating Individual Property Taxes
Property taxes are calculated based on the assessment value provided by BC Assessment. By law, the city cannot collect more in taxes than what is required to balance the budget. Therefore, city staff must recalculate the tax rate for each type of property annually, ensuring that only the necessary amount is collected from property owners.
To illustrate this calculation, let’s consider an imaginary town with three properties, all valued at $100,000. Assuming the total taxes needed to balance the town’s budget is $900, the tax rate must be set at $900 divided by the total value of all properties ($300,000), which equals $0.003. Each property would then have to pay the tax rate multiplied by their assessment value. In this case, it would amount to $300 per property.
Impact of Assessment Value Changes
However, it is important to recognize that assessment values can change from year to year. To demonstrate the impact of such changes, let’s take a look at another scenario. In the following year, the assessment values for the three houses in our imaginary town are as follows: House number one is assessed at $150,000, house number two remains at $100,000, and house number three decreases to $70,000.
In this scenario, the average new assessment value has increased by $6,667 or 6.67%. If the total taxes needed to balance the town’s budget remain the same at $900, a new tax rate must be calculated. Dividing $900 by the total value of all properties ($320,000) yields a tax rate of $0.0028125. Consequently, each house’s tax payment would change as follows:
- House number one: $421.88
- House number two: $281.25
- House number three: $196.87
Although the town still collects the same total amount of $900 needed to operate for the year, the individual tax payments vary. House number one experiences a significant increase in taxes, whereas houses number two and three see a reduction. The changes in assessment value impact the amount each property owner must pay, as the tax rate is recalculated based on the new assessment values.
Understanding the Assessment Process
To ensure accurate property tax calculations, it is crucial to review the assessment notice sent by BC Assessment in January of each year. This notice contains the assessed value of your property. If you disagree with the assessed value, you have until the end of January to appeal the assessment.
Conclusion
In summary, property taxes in Port Moody are determined by a combination of the annual budget, assessment values, and the tax rate. The City Council strives to provide the right level of services to residents while ensuring a balanced budget. By understanding the calculation process and reviewing your assessment notice, you can ensure that your property taxes are calculated correctly. If you have any questions or concerns regarding your assessment, don’t hesitate to reach out to your local BC Assessment office for clarification.