It’s time to simplify how civic governments talk about municipal property tax.
The biggest offender is what’s called the mill rate, which taxes a property owner based on the assessed value of the property they own.
The other tool most of the larger towns use in the Northeast, the base tax, is easy – if the base tax is $500 per residential property, everyone pays $500.
Current system
Here’s how the mill rate system works. You get an assessment for your property. Let’s say it’s worth $100,000. Only 80 per cent is taxable.
Now, it’s time to apply the mills. A mill is $1 of tax per $1,000 of taxable assessed value. So 24 mills is $24 of tax per $1,000 taxable assessed value. The word mill comes from mille, Latin for a thousand.
So if you’re taxed 24 mills and $80,000 of the assessment is taxable, the tax is $1,920, right? Not so fast. Most towns have what’s called a mill rate factor, so if you’re a residential property owner, you multiply that $1,920 by a certain number. In Tisdale, it’s 0.705. Your tax, from the mill rate, is actually $1,353.60. Commercial and agricultural properties tend to have higher mill rate factors. In Tisdale, they are 2.74 and one respectively.
A possible replacement
Confused yet? Tuned out because of the math? Good, because here’s my suggestion to make it all easier.
Make the entire assessment taxable. Then assign a percentage instead.
So the town wants to raise around the same amount of money? Then you pay 1.36 per cent of your assessed value in tax. Commercial properties would pay, say 5.3 per cent, while agriculture would pay 1.9 per cent. Add the base tax and other fees as needed.
Towns use the mill system because it’s traditional. It’s been used for so long they don’t even think about it. There’s no malice intended, but this is a case where tradition serves to obscure. The province should make the system easier to understand, so we all understand what we pay in taxes.
