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| Name | How your property taxes are calculated |
| Video Uploader | Video From City of Ottawa |
| Upload Date | This Video Uploaded At 25-04-2016 15:32:40 |
| Video Discription | Properties or portions of a property are classified according to the property's use. Each category represents a different tax class. http://ottawa.ca/en/city-hall/budget-and-taxes/property-taxes/property-tax-information ------------------------------------------------ Descriptive video: Okay, I want to explain to you how your property taxes are calculated based on how much your home is worth. Imagine there is a town that only has three homes. And they're each worth a different amount. The total cost to provide all of their town's services is $1000. This is collected through property taxes. Each home owner pays property taxes based on how much their home is worth. So, the value of all the homes are added up and divided by the town's cost. Which gives us the tax rate. This tax rate is applied to all the houses to get enough money to pay for all of the services. So, each home owner pays according to how much their house is worth. Every four years, the houses are reassessed. Let's say all three properties have gone up equally, in value. If we go back to our calculation, the total cost of services hasn't changed, but the total property value has increased. When this happens there will be a decrease in the tax rate. Now, when we apply that new rate on all the homes, everyone still pays the same. Let's recap. One. Property taxes are based on what a home is worth. If reassessments all increase equally, then everyone pays the same taxes as before. Now, let's say another four years has gone by and these homes are reassessed. During this time, the house on the right became more valuable in the market than the other two. Okay, so, time for a little more math. The total value of all the homes have increased, which means the town has to calculate a new tax rate. With this new tax rate, the first two homes will actually pay less than the home on the right that was reassessed at a higher value. Since the cost of services hasn't changed, the town doesn't need to collect more property taxes. However, since property taxes are based on a home's value, those taxes could potentially go up or down, based on the rest of the homes. So, what happens when the cost to provide services goes up? Well, it means more property taxes need to be collected from every home and a new tax rate is calculated. To get the new rate, we take that amount that the town now needs and divide it by all of the property values. The new rate is applied to all the homes and now everyone has to pay the new tax amount to continue to fund all of the services. So, let's review. One. Property taxes are based on the value of a home. When homes are reassessed equally, each home owner will pay the same amount, proportionately, as before. Two. When homes are reassessed at different values, each homeowner will pay a different amount proportionately, based on how much their home increased in value. Three. When the town's cost to provide services increases – a property tax increase – then, everyone pays their share, proportionately, across the board. And that explains the relationship between property value and property taxes. EeaBJXB55BM |
| Category | Education |
| Tags | Budget | Ottawa |
