The fact that your property’s appraisal under the new appraisal role will increase by 34.8%, as does the City of Montreal, does not mean that your municipal tax bill will increase by the same amount.
With a new three-year roll coming into effect, it’s common for cities and counties to lower their tax rate when property values rise sharply.
Take the average 34.8% increase in the value of real estate in Montreal. The Mayor Valérie Plante, in agreement with her municipal council, was able to decide not to increase the tax bill despite the increase in the value of the property.
Concrete example in Montreal
As an example, let’s say the co-ownership of “XYZ” has been valued at $360,000 so far. And that it has been revalued to $485,000 for the purposes of the new valuation role effective January 1, 2023.
On the 2022 tax bill, the general Montreal property tax rate was $0.5712 per $100 of assessment. Therefore, the amount of property tax paid by XYZ in 2022 on his $360,000 condominium was $2056.32. (The formula: 0.5712 x 3600 in $/100 valuation = $2056.32).
Given the new joint property valuation at $485,000, it would be enough for Mayor Plante to lower the 2023 tax rate to $0.4240 per $100 of valuation to make the amount of property tax in 2023 the same as the amount paid in 2022 remains .
If this rate were reduced in proportion to the increase in the value of his property, XYZ would have to pay the same amount in 2023 as he did in 2022, which is $2056.40. (The formula: 0.4240 x 4850 in $/$100 valuation = $2056.40).
But specifically, it is certainly not such a reduction in the basic tax rate, ie from 0.5712 to 0.4240 per $100 tax rate, that Valérie Plante’s administration will apply.
With reasonable inflation
Given inflation, the city of Montreal may want to increase its tax revenue by about 5% in 2023. This would be a compromise between Quebec inflation forecasts for 2022 (+6.5%) and 2023 (+3.2%).
If the city elects a 5% increase, the general property tax rate would increase from 0.5712 (in 2022) to 0.4452 (in 2023) based on the new assessment role.
If this were the case, XYZ would have to pay a general property tax bill of $2159.22 in 2023, which is $102.82 more than in 2022. The formula: 0.4452 x $4850/$100 assessment = $2159.22.
So much for the general property tax.
In addition, there is the special water tax, the “old town debt rate”, the taxes of the municipalities. All rates of these other taxes must be adjusted when the new assessment role comes into effect.
Elsewhere in Quebec
Not only in Montreal does a new real estate appraisal role come into force on January 1st. This new role will cover the years 2023, 2024 and 2025.
According to the Department of Municipalities and Housing, 116 cities and municipalities will have to submit a new assessment roll in 2023. Among them are Lévis, Rivière-du-Loup, Victoriaville, Sorel-Tracy, Saint-Jérôme, Mirabel, Terrebonne, Sainte-Thérèse, Bromont, Richelieu, Beloeil, Chambly, etc.
The revaluation of the properties is based on the value in July 2021.
To give you a “little idea” of the potential appreciation of properties in the new appraisal list, here is the increase in the median price of single-family homes between July 2018 and July 2021, according to the Association professionnelle des courtiers immobiliers du Québec.
- All of Quebec: from $246,000 to $369,000 (+50%)
- Montreal metropolitan area: from $336,250 to $500,500 (+48.8%)
- Quebec City metropolitan area: from $250,000 to $315,000 (+26%)
For condominiums, the average price increase from July 2018 to July 2021 is as follows:
- All of Quebec: from $238,000 to $330,000 (+38.7%)
- Montreal metropolitan area: from $265,000 to $360,000 (+35.8%)
- Quebec City metropolitan area: from $180,000 to $212,250 (+17.9%)
school taxes
The introduction of a new assessment role will also affect your school tax bill 2023, as it is based on this.
It also needs to be monitored whether the reduction in the school tax rate (per $100 tax rate) will largely offset the increase in new property values.
A piece of advice to all property owners affected by a new property appraisal in 2023: I invite you to review and compare your 2023 council and school tax returns to those for 2022.
