The Assessment Act states that an assessor “shall assess property at its actual value.” In forming an assessment, the assessor “shall have regard to the assessment of other properties in the municipality being assessed to ensure that the taxation falls in a uniform manner upon the real property that is subject to taxation in the municipality.” One of the tools to achieve uniformity is by using a “base date” on which to set the property values. What are “actual value”, “uniformity” and “base date”? These words require some explanation to be properly understood. Reference: Assessment Act—Sections 17
Actual Value means that value being the market value of the fee simple interest in the real property.
Market value is the amount of money that probably would be arrived at through fair negotiations between a willing seller and a willing buyer. Consideration is also iven to the uses to which the property may be put. The following characteristics of market value should be noted:
- is the most probable price, not the highest, lowest, or average price
- is expressed in terms of money
- implies a reasonable time to be exposed to the market
- implies that both the buyer and seller are informed of the uses to which the property may be put
- assumes an arms-length transaction in the open market
- assumes a willing buyer and a willing seller, with no advantage being taken by either buyer or seller
- recognizes both the present use and the potential use of the property
The Municipalities Act says that all municipal councils may impose a real property tax.
The council of a municipality must impose a business tax on anyone conducting business in the community. This tax is also based on the assessed value of the business property and land. The tax is payable by the owner and/or the tenant of a business.
After all the real property has been assessed, the council uses the information to set the mil rate. The mil rate is then used to establish individual tax bills. Reference: Effective January 1, 2000—Municipalities Act-Sections 112, 113 and 120
The idea of uniformity implies that the assessor, using standardized and acceptable assessment procedures, will consider all properties that are similar to the one being assessed. The value should then be similar to those other properties. Taxes for that property should be similar as well.
Base date is the date that the values of the properties in a Municipality are set for that particular assessment cycle. Any special or supplementary assessments carried out after this date will relate to the property values that were assigned as of this “base date.”
The base date for all municipalities is:
January 1, 2008 or January 1 of every third year after 2008
(Definitions Assessment Act, 2006)