- Oct 31, 2015
- Reaction score
That is the general gist of how the city’s taxes work, but it’s not that simple. New properties are new revenue sources and new costs centres. In theory if the new properties add more revenue than cost, it help lowers the overall tax requirement and if new costs are more than the new revenues it increases to the overall tax requirement. That part is simple enough, but the city can decide what the tax requirement will be. It’s not automatic that the city will lower taxes if 2000 new properties are added.This is 100% not the case. Only extra cost. Unless city council raises taxes, tax revenue is flat. Our tax system is revenue neutral market assessment. It means year over year a revenue requirement (tax revenue) is set then the property assessment is set, and the two are used to set the rate.
If council doesn’t change the revenue requirement and there is growth that means all other things being equal the rate drops.
Our system was designed my conservatives to ensure every bit of extra revenue is a tax increase, not automatic.
If these new apartments contribute more revenue than costs, the city can use that extra revenue gain to increase the tax requirement without having to increase taxes. Because nobody’s taxes go up, but there is more money being raised through taxes it could be seen as increasing revenue. I think this is what Havanero is getting at.
Rather than describing the new apartments as adding revenue, I would describe them as adding revenue sources. Depending on how the city does its budget they could be considered as adding revenue.