Putting Taxes in Perspective
As you know, Guelph Council passed the 2015 budget with a 3.55% tax levy increase over 2014. Since property assessment of each individual home plays a large role in determining the exact tax increase, it wouldn’t be fair to say that the taxes on each home will increase by exactly 3.55%. Looking at averages across the city, though, homeowners will pay approximately $130 more in property taxes in 2015 than in 2014.
Many people are unhappy about the rate of increase, believing it is too high and unaffordable and unsustainable. Many would have preferred that council keep the tax levy increase to the 2014 average Ontario rate of inflation of 2.4% or less. It’s a fair comment, which is no more or less valid than any other opinion. A 2.4% increase would have saved the average homeowner $42 throughout 2015, resulting in an $88 increase for the year instead of $130.
But let’s put that $130 into some perspective.
According to real estate sales data (below) from the Guelph and District Association of REALTORS® – to which I belong as a real estate broker – the sales price of the average Guelph home increased 5% from $323K to $337K. That means the assets of the average homeowner increased by $14,409 between 2013 and 2014 based on the increased value of their home. One of the reasons house values appreciate consistently in Guelph is due to the sheer awesomeness of the city – which is largely influenced by the services and benefits the city provides. Services and benefits that are funded through annual tax increases.
By paying $130, the average homeowner gains over $14,400 in value. That’s a massive 11,000% return on investment.
So is the 3.55% tax increase fair and measured and balanced? I think so.