Beware the Fall Leaves

One of my neighbours was concerned about my fish ponds as he brandished a copy of Saturday’s Nugget with its headlines on lakeside property assessment. He enjoys looking at the little ponds where my brightly coloured fishes cavort among the water lilies and hyacinths. What if the assessment office finds out about my ponds and increases our assessment as they have done for lakeside properties?

Reading the article as he held the paper in his shaking hands, I could see where he might be confused since the value of the properties seems to be based on beautiful sunsets, children swimming and playing in the water, hungry quacking ducks and crapping seagulls, among other things. I tried explaining market value assessment to him, but he is of a philosophical bent and would have none of it.

According to him, if the value of the property goes up because people find it desirable to see a lake in winter as well as summer, then we ought to increase the assessment for people who enjoy the view of the coloured leaves in fall. This would then raise the assessed value of all properties in the city, following the logic of MPAC, he says. It was my turn to hush him because the MPAC have spies everywhere, watching for home improvements, new swimming pools, nicely manicured lawns, display flower beds and mosquito-proof gazebos. If people start enjoying these things as much as the lake views, we could all face a tax grab by the City because we all know how they can hide property tax increases due to changes in assessed value.

I tried once more to convince him of the fairness of market value assessment and how it is used to increase the tax base in neighbourhoods where their have been recent sales. But his argument was starting to make sense to me, a dangerous thing when one begins to agree with a back-yard philosopher. Not everyone who lives near a lake enjoys or values the location. Those who share a public lake access with all the citizens of the city, complain about the disturbance of little people paddling in the water, sail boats being launched and laughter as children walk by on their way to the lake. I opined that these folk ought to approach the Mayor and have him close the public access, but that led to another tirade.

Just as swimming pools do not add to the value of a property when it is assessed, the lake view ought not to be generalized as increasing property value. I agreed that some people said swimming pools decrease the value of their property when they try to sell. Exactly his point, he said.

The market value of a property is only defined when a buyer takes possession of the lake view property. The property has no increase in value until it is sold! Just because your former neighbour found someone to buy his property based on the apparent value to the new owner, does not increase the value of neighbouring properties until they are sold. What if you try to sell your property and can only find a buyer who does not like seagulls, shadflies and spiders? Your market value will then be established at a much lower amount.

So, says my neighbour, only the person who paid the ‘market’ value ought to pay his/her property taxes on what he or she perceived as the true value of the lake view (or coloured leaves, fish ponds, etc.). It may be that the true market value will one day change on your property, improvements aside, but until it is sold, that market value was established by you when you bought the property.

If you knew or thought that the property taxes would escalate far beyond your budget you may have not bought in that area unless you were a speculator and were willing to bear the tax increases until the property flipped to a new owner. For a pencil-pusher to change holus-bolus neighbourhood property values because someone, in your opinion, paid too much for a property is wrong.

My neighbour says it is just another case of the rich having the poor pay for their excesses. By having the ‘market value’ of all houses in an area increase because you paid too much, and thus having your neighbours pay more taxes, you in effect lower your property taxes on the lake-view property.

His thinking was simply too complex for me although I tried once more by saying that our elected officials would never allow such a preposterous thing to happen in North Bay. That started him off on another tangent so I offered him a beer on the back porch in the hopes that this most proletarian of drinks would calm his fears of coloured leaves. Two days later, I am still wondering if he might not be right.