It may soon be time to pay the piper, with real estate investors in Toronto facing the possibility of property tax hikes because of the meteoric rise in prices over the last several years.
The expected increases in property values across the city “reflect the local real estate market and confirm that most homeowners in the area have seen an increase in the value of their property over the past four years,” said Joe Regina, municipal relations account manager for the Ontario Municipal Property Assessment.
Average home values in Toronto have climbed by 22.8% since 2008, according to a recent report from MPAC. The report also indicates that the increases, in many cases, will translate into an average assessment increase of 5.5%.
Still, property value increases are not necessarily a harbinger of higher taxes, however. The MPAC adds that a tax hike may not occur if the assessed value of a property rises by the same percentage as the average in a specific area.
Those with Toronto-based properties in their portfolios might find themselves in a bit of a jam with these expected increases, especially if they are directly affected by the jump in property taxes. As a result, some investors may be forced to sell off some of their assets in order to maintain return on investment objectives.
In fact, investors who are looking to purchase properties in Toronto may want to exercise caution before closing on anything, advise experts, pointing to value gains that may ultimately force property tax increases over the next four years.
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