Cause he’s the Tax Man
This time of year is magical in terms of the sheer volume of money that seems to go for taxes in my household.
First we have the CRA and Income Tax coming due in April, which causes lots of excitement as I mentioned in How Do You Do Your Taxes?, and I am happy to say that this part of the Magical Tax Mystery Tour is over, with my E-filing this past weekend. I like to get those in early, especially when the government owes me money (and even if you owe them money, you don’t have to pay until the last possible day).
The second exciting part of this Tax Trek is Property Taxes that I owe to the City of Ottawa. Ottawa’s system has a couple of ways you can pay and I choose to make the two payments they ask for in March and May (you can pay monthly if you wish as well), and this makes for the right hook portion of the tax combination punch I receive this time of year.
Property taxes have continually gone up since I started owning a house about 13 years ago, as various levels of Government off-load their own service load and down load them to the municipal governments, but also the City of Ottawa is an interesting story all on its own with Amalgamation and the fact that the City of Ottawa keeps growing (and thus its thirst for Tax Funds is never quite satiated).
Given I seem to live in my finances in this time of year, I always end up noticing interesting points that these taxes bring into focus for me:
- I pay more in Property Taxes than I do in Mortgage Interest on my house. I guess this is a good thing, but this may change when interest rates go up.
- With Income Tax there is always a chance that I will get a refund from the Government, but this is never going to happen from my Property Taxes (which explains why I seem to loathe Property Taxes more than Income Taxes).
- Property Taxes are the only tax on the Perceived Value of something, as opposed to actual value or income. If I sold my house for $1 tomorrow, but the City said it was in fact really worth $1,000,000.00 they would be right and that would be what the new owner of my house’s valuation would be. I have seen many people successfully argue that their property valuation was too high, but it is a tedious and slow process (and you might end up with a higher valuation if you are not careful).
- If I wanted to pay more Property Tax, in exchange for more services (say better street lighting, better sewers or a fire hydrant near-by), I would not be allowed, and there is no way for me to buy these service improvements from a private firm either (given the city has a monopoly on these services).
- Even though a portion of my property taxes goes to the School board of my choice, this does not guarantee my child an education with that board. If they feel my child is not suited to their service (behavioral, or because they have a learning disability or other reasons) they can refuse me this service, and I have little recourse (but I still must pay the fees). That one is always an interesting discussion point to bring up at a party that seems to be too quiet.
I don’t think there is anything too deep in those points, just some stuff I noticed about my property tax bill.