With the sharp increase in property assessments noted this year in Montreal and elsewhere, many owners are considering requesting a review for fear of an increase in their municipal taxes to be paid. The downward trend observed in recent years could thus be reversed next year, certain associations foresee. But is the game worth the candle?
In the years following the implementation of the 2014 property assessment roll, some 7,668 requests for review were received by the City, according to data obtained by The duty. This number dropped by 40% following the 2017 roll, then again after the 2020 roll, to 3,028 disputes, the vast majority for residential properties.
The number of requests for review has therefore experienced a steady decline over the period corresponding to the last three Montreal property assessment rolls.
However, the entry into force of the new role, on 1er next January, is already arousing a great deal of discontent. It provides for an average increase of 32.4% in property assessment on the island, a percentage that reaches 35.5% for residential properties, unheard of since 2007.
“I think the trend could be reversed given the increases [des valeurs foncières]which are gigantic,” says real estate lawyer Jimmy Troeung bluntly about the disputes that many Montreal owners are likely to make in the coming months.
“I don’t have a crystal ball, but I would like to point out that in 25 years, the real estate sector has not experienced the following various factors: rapid inflation, greater than what we have experienced in the last two decades; a rise in land values which is quite high; and a continued rise in interest rates. […] This is combined with a market that has tightened rapidly, ”explains the director of public affairs for the Corporation of Quebec Real Estate Owners, Marc-André Plante.
These are all factors that could affect the finances of owners – especially those with more modest incomes – and encourage them to request a review of their property assessment, also believes the president of the Association of Quebec owners, Martin Messier. “When there are major increases, it can be easier for an owner to justify the investment, both in time and money”, in this procedure, he underlines in an interview.
Solid foundations to challenge
A property owner who has recently received a Property Assessment Notice that does not reflect the true value of their property may request a review. But it is not enough to disagree with the amount indicated: it is necessary to be able to demonstrate that it is inaccurate.
“The question you have to ask yourself before filing an official review request that incurs costs is not: ‘How much more tax will I pay with this assessment?’ It is rather: “Is the municipal assessment, on the reference date, at fair value?” “, notes Pierre Goudreau, president of the Order of chartered appraisers of Quebec.
When there are major increases, it can be easier for an owner to justify the investment, both in time and money, [dans cette procédure]
“If you’re not sure, you can contact a certified appraiser to do a summary analysis. He will be able to tell you whether or not it is worth challenging,” he suggests.
It is quite possible that a property assessment is incorrect — for example, due to a contamination problem inside the property that the municipal assessor is unaware of because an in-depth analysis does not take place than every nine years—explains Mr. Goudreau. A property may also have been classified in the wrong building category, he adds.
However, a request for review is not free of charge. His deposit costs a minimum of $75 (non-refundable), if the property is valued at $500,000 or less. And if the property is worth between $500,000 and $2,000,000, the bill increases to $300. Added to this are the appraiser’s fees, which can amount to several hundred dollars.
So it’s a think about it. “The tax savings must be greater than the costs paid for it to be worth the effort,” notes Mr. Goudreau.