PEI

5 things that make your P.E.I. property tax bill go up (or down)

Every year, as crocuses and then tulips push up through the red soil and snowbirds tweet their return to their summer homes, there’s a slightly less welcome sign of spring arriving in Island mailboxes — new property tax bills.

The consumer price index gave Islanders a break on their property taxes this year — but your mileage may vary

Here's a brief primer on how your tax bill is calculated — and what can make it go up (or down). (iStock)

Every year, as crocuses and then tulips push up through the red soil and snowbirds tweet their return to their summer homes, there's a slightly less welcome sign of spring arriving in Island mailboxes — new property tax bills.

Since 2011, Islanders have seen a fairly steady increase in the property tax they pay. The value of assessments has been tied to the consumer price index of the previous year.

Generally, that means the assessed value of your property goes up somewhere in the range of two per cent per year. And that means the property tax you're charged goes up the same percentage.

But in 2015, P.E.I. recorded negative inflation of about –0.6 per cent. The bad news: that doesn't mean your property tax assessment goes down. The good news: neither does it go up.

Just because the consumer price index didn't push your assessment up, though, that doesn't mean your taxes will stay the same.

Here's a brief primer on how your tax bill is calculated — and what can make it go up (or down).

1. Provincial and municipal rates

The P.E.I. government collects property tax at a rate of one per cent of assessed value of a residential property. Or, as you'll see it printed on your tax bill, $1 per $100 value in assessment. (Never mind that it says $1.50, more on that below).

If you live in a municipality, the municipality also collects at their own rate — and those rates vary across the Island. In Charlottetown, it's another $0.67 per $100 in value, for a total of $1.67.

If your property's taxable value assessment is $100,000, that puts your property taxes at $1,670 for the year, payable in three instalments.

The provincial property tax rate has been steady for years. But municipalities can and do change theirs. Sometimes they even go down.

Here are some municipal rates that changed this year, and how they would affect the annual tax bill on a home assessed at $100,000:

Municipality 2015 rate 2016 rate Tax change on $100k assessment
Miltonvale Park $1.146 $1.166

$20

Greenmount-Montrose $1.10 $1.12

$20

Hazelbrook $1.187 $1.199

$12

Alexandra $1.11 $1.10

$–10

Souris West $1.10 $1.09

$–10

2. Non-resident tax rates

One of the issues that contributed to the controversy surrounding Mike Duffy and his status as a P.E.I. senator was his provincial tax status: Duffy was being taxed as a non-resident.

P.E.I. defines a resident, for property tax purposes, as someone who resides in the province for 183 consecutive days or more in each taxation year.

You may notice on your tax bill it says the provincial property tax rate is $1.50 per $100 in assessment. Residents are instantly rebated 50 cents of that. Another way to look at it: non-residents pay 50 per cent more provincial property taxes than residents do.

Some municipalities also have a higher non-resident tax rate, but most charge the same regardless of where you live throughout the year.

P.E.I. defines a resident, for property tax purposes, as someone who resides in the province for 183 consecutive days or more in each taxation year. (Reuters)

3. Value reassessment

The consumer price index isn't the only thing that can push up the assessed value of your home. Your assessment will also go up when you make improvements.

You'll notice your tax bill actually includes two assessments: market value and taxable value. As long as the property is an owner-occupied residence, you pay based on the latter (often lower) value. On commercial or rental properties, taxes are based on the market value assessment.

When a house is sold, the assessment value changes to the current market value, according to government.

Increases in market values are determined by provincial assessors, and those increases aren't limited by the increase in the consumer price index. They can (and do) go up by more than that. 

4. Fire district dues

In many rural areas, property owners will be charged dues payable to the local fire district.

Many charge a flat fee based on the type of property, but some charge a rate similar to the way provincial and municipal taxes are charged.

Quite a few fire districts are increasing their dues this year, among them: Gerorgetown Fire District, Winslow North Fire District, North River Fire District, Miscouche Fire District and Johnston River Fire District.

In many rural areas, property owners will be charged dues payable to the local fire district. (Cassie Williams/CBC)

5. Wastewatch fees

Garbage collection fees are also charged on your property tax bill. The current annual rate of $205 per household was set in 2012.

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