Winnipeg Property Tax question

I'm sure there's someone here who is knowledgeable about property taxes, so here goes!

Living in the North End (or as I like to call it, South Maples), my wife and I enjoy an affordable property tax bill on our 1100square foot house.

We've looked at moving into a bigger house, but a lot of areas can have upwards of $4000 tax bills, which make me shudder. As such, we've considered adding on to our current house.

We thought of two options, expanding out, and expanding up.

Would any of these options result in a higher tax increase than the other? Or would both be result in the same, assuming the square footage added is identical in each option...

probably won't affect your taxes at all, assuming the square footage is the same either way.

the problems you'd really face are:

permits - permit prices are based upon estimated costs for construction
costs - building up would probably cost more (pure logistics), though offer better value when selling...since you won't be reducing the yard size (assuming you have a yard).
bylaws/variances - there is a law in winnipeg about how much of your yard can be covered by building (including decks & other structures). I forget what the actual number is...but it's something like 'no more than 75% of your property' may be covered.

Just some other things to consider when planning.

yes u will see an increas as ur value will go up

not to mention u will be adding rooms that all afect ur taxs

Thanks for the answers everyone! I'm hoping to build up!

Check out the new property taxes ready for the 2010 tax year (I think). Prices have soared. Think twice before expanding, uhm, or shrinking, your wallet...

Electrician wrote:Check out the new property taxes ready for the 2010 tax year (I think). Prices have soared. Think twice before expanding, uhm, or shrinking, your wallet...

Well, we're hoping to have a second child at some point in the future, and are going to need the space! I think in the long run it may be more affordable to expand than to build new!

I have not clue one about the expansion cost of going out versus up, but I understand a bungalow is more expensive to build that a two-story. I understand it has to do with a) increased footprint costs and 2) increased roofing costs.

So assuming you'll need no reinforcing of your foundation and you are literally raising the roof, I imagine going up will be cheaper.

I don't think taxes are based on that stuff...they're based on the market value alone. Of course, everyone knows that the value is based on several factors, one of which is the number of stories.

The taxes are based upon square footage of land & home...not market value.

Market value is determined by what people will pay...taxes are determined by what the value of the home should be should it need to be replaced.

AND...yes GOM...initially your estimate is true...unless you already have a 1-story and are making it a 2-story...as either way you have the same roofing costs...but you have to structurally make sure the foundation you're building on can sustain the weight of the 2nd story (that it wasn't only engineered for a 1-story), and remove the old roof, build new flooring, build new foundation, and add a new roof.

To expand out...you simply have to grade the ground, put the foundation in...and then build...and then tie-in to the old house (take a wall out)...much simpler for existing homes with plenty of land.

I also was under the impression that property tax was based on value. Why did my parents taxes go way up when they land scaped the property?

Bartron wrote:I also was under the impression that property tax was based on value. Why did my parents taxes go way up when they land scaped the property?

Any improvements to a home/property increase taxes & value...though I doubt landscaping did much to their taxes.

Odds are they took out a permit for it...which made the government actually send an inspector out who reported back and they actually sent an estimator out who realized they hadn't done an assessment in quite some time.

Had they not gotten the permit...the odds are good their taxes would not have increased.

Add to that timing...as EVERYONE in Winnipeg had their taxes spiked over the past year...perhaps they just went up like everyone else and it happened to be when they finished landscaping.

AGEsAces wrote:

Bartron wrote:I also was under the impression that property tax was based on value. Why did my parents taxes go way up when they land scaped the property?

Any improvements to a home/property increase taxes & value...though I doubt landscaping did much to their taxes.

Odds are they took out a permit for it...which made the government actually send an inspector out who reported back and they actually sent an estimator out who realized they hadn't done an assessment in quite some time.

Had they not gotten the permit...the odds are good their taxes would not have increased.

Add to that timing...as EVERYONE in Winnipeg had their taxes spiked over the past year...perhaps they just went up like everyone else and it happened to be when they finished landscaping.

Cool , makes sense to me.

well if ur going to be paying higher taxs minus well get ur moneys worth outa ur home

AGEsAces wrote:The taxes are based upon square footage of land & home...not market value.

Market value is determined by what people will pay...taxes are determined by what the value of the home should be should it need to be replaced.

Huh???

Where did you get that idea from? You're mixing up insurance value with some other stuff I believe...

taxes are based on messed up market value.

exactly.

Taxes are based on market value to get a mill rate which is a percentage of the total taxes collected. It's all relative property values, nothing to do with your individual property assessment, only how it relates to other homes in Winnipeg. If everyone assessment goes up the same percentage, no one's taxes increase. Your assessment increase has no impact on property taxes if it's an increase across the whole city.
But if you add an addition your relative value goes up and thus your taxes. If you apply for something like a renovation property tax credit, they will do an assessment of your house at the end and increase your property taxes.

10. What is a Market Value System?
A market value system means property assessments are based on potential selling prices at a specific point in time – such as the reference year or date. The Municipal Assessment Act defines market value as the most probable selling price of your property had it been sold by a willing seller to a willing buyer -- or in other words, under normal market conditions.

When determining the market value of your residential property, valuation staff consider many of the same things a purchaser would, including size, layout, age, location, quality and condition of buildings, and available services in the area.

11. How is the Market Value Assessment of my property determined?
To estimate market value in a consistent and fair manner, valuation staff use a direct sales comparison approach. This approach is widely accepted as the best way to estimate market value for residential properties because of the large number of sales that are considered in the process. Valuation staff look at homes that have sold and compare property characteristics to determine which ones influence value – and
how important they are – in determining the sale price. This information is then used as a basis for market value assessment.

14. If the assessed value of my property goes up in a General Assessment year, does that mean that my property taxes will increase?
Property value increases during General Assessment do not necessarily mean increases in property taxes. A General Assessment is not a revenue-generating process – it is simply a mechanism that determines up to date market values to ensure the tax burden is shared fairly. Remember that the percentage change in your assessed value in a general assessment year does not result in an equivalent change in your property taxes. The total amount of taxes collected by the City of Winnipeg depends on the civic budget – not the total value of assessment.

AGEsAces wrote: 10. What is a Market Value System?
A market value system means property assessments are based on potential selling prices at a specific point in time – such as the reference year or date. The Municipal Assessment Act defines market value as the most probable selling price of your property had it been sold by a willing seller to a willing buyer -- or in other words, under normal market conditions.

When determining the market value of your residential property, valuation staff consider many of the same things a purchaser would, including size, layout, age, location, quality and condition of buildings, and available services in the area.

11. How is the Market Value Assessment of my property determined?
To estimate market value in a consistent and fair manner, valuation staff use a direct sales comparison approach. This approach is widely accepted as the best way to estimate market value for residential properties because of the large number of sales that are considered in the process. Valuation staff look at homes that have sold and compare property characteristics to determine which ones influence value – and
how important they are – in determining the sale price. This information is then used as a basis for market value assessment.

14. If the assessed value of my property goes up in a General Assessment year, does that mean that my property taxes will increase?
Property value increases during General Assessment do not necessarily mean increases in property taxes. A General Assessment is not a revenue-generating process – it is simply a mechanism that determines up to date market values to ensure the tax burden is shared fairly. Remember that the percentage change in your assessed value in a general assessment year does not result in an equivalent change in your property taxes. The total amount of taxes collected by the City of Winnipeg depends on the civic budget – not the total value of assessment.

But a few post up you say "The taxes are based upon square footage of land & home...not market value."

I'm confused.

So am I...I took a course about this from a home inspector/assessor...he told us it was based upon square footage of the land & home...that "market" value really meant nothing when it came to assessment & taxes because it can be inflated due to things outside the owner's control (schools, crime, etc.)

Apparently he was either wrong...or I misunderstood what he was talking about .

AGEsAces wrote:So am I...I took a course about this from a home inspector/assessor...he told us it was based upon square footage of the land & home...that "market" value really meant nothing when it came to assessment & taxes because it can be inflated due to things outside the owner's control (schools, crime, etc.)

Apparently he was either wrong...or I misunderstood what he was talking about .

Ok good! For awhile there I was starting to really doubt my reading comprehension .

The city uses a hedonic pricing model to valuate property for tax purposes. This model looks at the characteristics of a house (# of stories/type of house; square footage, features, etc....) and the relative impact of those particular features on the prices of house, using actual market data.

In stats terms, housing price is this dependent variable and house type, square feet, # washrooms, etc. are independent variables. That regression is run against a sample of houses in the market. The coefficients for each independent variable from this regression analysis are used to estimate the value of all houses, based on the info that the city has about those houses.

.. I should add that this is relatively new. The old assessments were based on some other methodology (possibly involving monkeys and a bag full of blocks with numbers on them).

The old and the new system sound the same to me.

It's still a guessing-game-art-thingy and not a science, as some wish us to believe that it is. Location is probably the most important factor in determining the value of a property btw.

I am sure they take location into account, probably by running different regressions for different areas of the city.

It's the most scientific way I can think of to do it.