After experiencing a steady decline in recent years, the number of Montrealers who contest their property assessment has started to rise again, with thousands of owners hoping to obtain a reduction in their tax burden, learned The duty. Among them are non-profit organizations forced to pass the bill on to their low-income tenants.
Every three years, the City of Montreal adopts a new property assessment roll that determines the value of residential, commercial and industrial properties on its territory. This assessment then serves as the basis for the tax charges that are imposed on owners in metropolitan France on an annual basis. Property owners who wish to contest their property assessment, in the hope of obtaining a reduction in their property taxes, had until April 30 this year to submit a request for review to the City, which has four months to respond to them, at from the moment this request is made.
Since 2014, the number of landlords challenging their property assessment has steadily declined. Thus, 7,668 disputes were noted in 2014, compared to 4,575 three years later and 3,028 in 2020.
However, this trend has been reversed this year, show data provided by the City of Montreal to the Duty. Thus, 6,065 requests for review of a property’s property assessment were received this year. These represent 1.2% of buildings in the metropolitan area. A low percentage, but still twice as high as in the previous role.
Moreover, among the disputes received this year, 4359 relate to residential properties, a higher number than in 2020. A situation which arises at a time when inflation and high interest rates have severely affected the finances of many owners in recent months. “All Quebecers and Canadians are tighter, everyone’s wallet is impacted,” notes the director of public affairs at the Corporation of Quebec Property Owners (CORPIQ), Marc-André Plante. The latter is therefore not surprised that more owners this year have contested the assessment of their property.
“The explosion in the number of disputes is not surprising when we know that Montrealers have suffered the largest tax increase in 12 years,” said the head of Ensemble Montreal, Aref Salem. According to him, this increase in requests for review sends “a clear message” to the administration of Mayor Valérie Plante: “She can no longer afford to dip into taxpayers’ wallets again and again. »
Market reality
The last property assessment roll caused the property value of buildings in the residential sector to jump by 35.5%, the highest rate noted since 2007. The City has, however, reduced the tax rate per $100 of assessment and spread over three years the increase in the property tax, in order to reduce the impact of the bubbling real estate market on the tax burden of owners. In the end, the City’s latest budget still led to a 4.1% increase in municipal taxes for Montrealers this year, the largest increase since 2011.
In addition, the property assessment roll is based on a state of the market 18 months before its entry into force, which always takes place on 1er January. The roll in force therefore represents a portrait of the value of the properties as of 1er July 2021, a reference date that has been criticized in recent months by homeowners’ associations since the real estate market was then in full swing.
However, despite a drop in property sales noted last year, the median price of single-family residences and condominiums is currently at a level comparable to that which was in effect in July 2021. A finding that makes the director of the service say of the market analysis to the Professional Association of Real Estate Brokers of Quebec, Charles Brant, that the real estate assessment roll of the metropolis is faithful to the reality of the real estate market.
“The assessment roll is not a perfect measure, but there is not necessarily a better one either,” observes Marc-André Plante of CORPIQ.
Tenants pay
The increase in property taxes noted in Montreal does not only affect the owners concerned, but also many tenants. As Marc-André Plante reminds us, the “entire” increase in the tax burden of an owner of rental properties can legally be transferred to his tenants when the leases are renewed. “In the end, it is the tenant who pays the increase in the three-year roll” of property assessment, he summarizes.
In this context, non-profit organizations that manage community housing find themselves having no other option than to increase the rents of their tenants, whose financial situation is nevertheless precarious. Housing lawyer Manuel Johnson represents several housing co-ops in Montreal who are challenging their most recent property assessment in the hope of easing their financial burden and, in turn, that of their tenants.
“The NPOs that I represent are organizations that mainly rent to lodgers, and therefore to very vulnerable tenants,” Mr. Johnson said in an interview. However, “how can we maintain low rents and a good state of maintenance if taxes are always going up because of the speculation that we are currently experiencing in Montreal? asks the lawyer.
Martin Croteau, administrator of a housing cooperative in the Milton-Parc district, indicates that the members of this organization voted this year for an 8% increase in the rents imposed on the tenants of the 30 apartments concerned. “It’s still a significant increase,” notes Mr. Croteau, whose organization challenges the property assessment of its 14 buildings, partly responsible for the increase in rents imposed on its tenants.
Mayor Valérie Plante’s office declined to comment.