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Montreal property tax hikes reflect 'the real estate market at work'

Montreal property tax hikes reflect 'the real estate market at work'
As the city of Montreal unveiled its 2012 budget, nowhere was the real estate market's influence on tax bills evidenced more dramatically than in Plateau Mont Royal, where homeowners' tax levies rose 5.66 per cent, on average.

MONTREAL - Anyone who's ever taken a ride on the real estate gravy train knows that before the trip finally ends with a theoretical profit thanks to increased property market values, regular stops to pay the piper must be made along on the way - the piper being the municipal tax collector.

In Montreal boroughs, just how hot - or not - local real estate values were perceived by city assessors was a factor in determining how far the 2012 tax bills of home or business owners would be pushed over the citywide average of about three per cent (2.5 per cent on property evaluation plus a half per cent paid for water system maintenance).

And as the city unveiled its $4.7 billion budget for 2012 on Wednesday, nowhere was the influence of the real estate market on tax bills evidenced more dramatically than in the tax hikes recorded in the borough of Plateau Mont Royal, where homeowners saw their bills increase an average of 5.66 per cent and businesses were hit with an average tax increase of 6.58 per cent.

"I don't like to defend the Tremblay administration," borough mayor Luc Ferrandez said, "but in this case it's not a political decision - it's the real estate market at work."

Ferrandez, who has been among the most vocal critics of the city's decision not to increase local borough funding, noted that budget planning for 2013 has already begun in his borough. A local pool was saved from being shut this year by a decision to increase the price of parking stickers for residents.

That kind of spit and bubble gum approach to making fiscal ends meet is becoming a fact of political life in Montreal, where the central city allocates funding to its 19 boroughs for local services.

Benoit Dorais, an opposition councillor and mayor of the Sud-Ouest/Southwest borough, summed up the situation this year when he announced it might be necessary to shut a local pool, cut 10 borough office jobs, re-think the future of several community centres and impose a special local tax to help cover a $2-million borough budget shortfall.

Dorais told reporters that while the central city was reaping "millions" in tax revenue from residential developments in Griffintown district, it was the borough that had to pay to install fundamental infrastructure costs to keep those developments afloat, be it in the form of sewer systems, sidewalks or garbage collection.

He added that since city hall refused to index borough funding to inflation, that problem wasn't going to go away anytime soon.

When the 2012 budget was unveiled, the borough's bookkeeping included the imposition of a special tax that expected to bring in about $706,000 more in revenue. That additional tax bite plus whatever bump in the real estate market has been created by the Griffintown development led the borough to post the third-highest average tax increase in the city - 4.88 per cent.

The Sud-Ouest/Southwest is among nine boroughs obliged to impose local taxes to cover expenses in 2012.

When Tremblay was asked on Wednesday about funding for local services and the variation in average tax bills from borough to borough, he referred to the vagaries of the real estate market and repeated the mantra of his executive committee colleagues:

"If the elected representatives at the local level (decide to impose a local tax to fund borough projects), it's up to the elected representatives of the borough to explain why they decided to have a borough tax."


Read more: http://www.montrealgazette.com/business/Montreal+property+hikes+reflect+real+estate+market+work/5793436/story.html#ixzz1fJs9TO9I