Home prices in Saskatoon have dropped about eight per cent from the last date used for property assessment on Jan. 1, 2015 and the date that will be used for the next assessment on Jan.1 of this year.
Liam Richards / Saskatoon StarPhoenix
Nobody likes to see the value of their property drop, but the one possible positive outcome could be that a lower assessment will mean a reduced tax bill.A lot of property owners in Saskatoon will likely see the assessed value of their homes or businesses drop during the next round of reassessment, but it won’t necessarily mean a break on taxes.Here’s why.“In general, changes in assessed value do not change the amount of property tax homeowners pay if everything is equal,” the City of Saskatoon’s director of finance, Clae Hack, explained in an email. “For example, if the budget dictates we need $200 million from property taxes and all assessed values go down by 10 per cent, at the end of the day we still need $200 million to deliver on our budget.”The city adjusts the mill rate, which determines how much tax people pay based on the assessed value of their properties, to collect the amount of taxes needed to pay the bills.“Where changes in assessment and impact on property taxes become complex is when housing values decrease/increase by a different amount,” Hack continued.He offered this example, using an assumed 10 per cent drop in the average value of property in Saskatoon. If your home drops 10 per cent in value with all else remaining equal, your taxes will remain the same because the drop in value mirrors that of the market.If your home’s value drops by 15 per cent, you would pay less in taxes because your property’s value dropped more than the average.But if your home decreases by five per cent, Hack noted, you would actually wind up paying higher taxes because the drop is not as severe as the average.Needless to say, that last one’s a tough sell.We’re already well past the date that will be used for the 2021 reassessment, which was Jan. 1, 2019. And Hack’s example of a 10 per cent drop is pretty close to what’s happened to the Saskatoon housing market over the last four years.The Saskatoon Region Association of Realtors prefers the benchmark price for homes over the average or median price since it better reflects the market.The benchmark price for all homes, including single-family, condos and townhouses, dropped from $312,800 on Jan. 1, 2015, the base date for the 2017 assessment, to $286,800 on Jan. 1, 2019.That’s a decrease of about eight per cent.For most of this century, Saskatoon homeowners and business have dealt with rising assessments and higher property taxes. Now, values seem destined to decrease.And it won’t matter what prices look like over the next two years, since the date used for the next reassessment has already passed.These big swings in property value have prompted some in Saskatchewan to start lobbying for a more frequent reassessment cycle.In Western Canada, only Saskatchewan waits four years to reassess properties. Manitoba does it every two years and Alberta and B.C. assess properties every year.Taxpayers in those provinces can obviously feel their property assessment more accurately represents the actual value. In Saskatoon, the number of appeals has risen over the last three reassessments.But there’s no indication the Saskatchewan Assessment Management Agency (SAMA) intends to change the rules.SAMA is an independent agency governed by a board appointed by the province, the urban sector and the rural sector.SAMA was created in 1987 when it became clear that property assessment in Saskatchewan was severely out of whack.That led to the reassessment crisis of 1997, when an updated process to evaluate property was introduced based on 1994 values, although Saskatoon city council opted for a three-year phase-in.Homeowners, businesses and politicians panicked 22 years ago about the prospect of higher assessments and taxes.Prior to that, if you can believe it, property taxes were levied based on 1965 values.Assessment every 30 years seems utterly ludicrous now, but Saskatchewan is increasingly looking like an outlier by waiting four years.Swings in property value only magnify the outdated nature of this province’s email@example.com/thinktankSKRelated