Jump in Montreal property valuations won't mean same jump in taxes, city assures

Assessments for property tax are up by 32.4 per cent on the island of Montreal.

That’s a precipitous jump from the 2020-2022 tax roll, which showed a 13.7 per cent increase in values from the previous one. Three years before that, the increase was 5.9 per cent.

Residential properties have jumped in value by an average of 35.6 per cent from three years ago. Single-family homes are up 38.6 per cent, while condominiums went up 30.7 per cent, according to the 2023-2025 valuation roll for Montreal, unveiled Wednesday.

The assessments reflect the estimated value of properties in Montreal and its 15 on-island suburbs as of July 2021. The new valuations will come into effect on Jan. 1.

The average assessed value of a single-family house in the agglomeration is now $840,000, up from $600,000 three years ago. The average value of a condominium is $492,400.

It was the largest jump in valuations since 2007, when home prices went up by 38.6 per cent

The rapid rise in assessments won’t mean a corresponding jump in tax bills, Dominique Ollivier, president of the city’s executive committee and member responsible for finance, was quick to note.

“It’s no surprise, given that the real estate market has been booming on the island of Montreal and property values are rising,” she said. “To reassure you right away, the significant rise in the valuation of properties will certainly not mean property taxes will increase by 32 per cent.

“As with every new valuation roll, the city will readjust the tax rate downward in their budgets so that in the end, the tax bills of Montrealers will be close to previous years.”

Historically, municipal tax hikes have stayed close to the rate of inflation, at around two per cent. Ollivier noted that with inflation rates now at eight per cent, putting pressure on the city to pay more to its suppliers and contractors, Montreal’s tax rate will likely rise by more than two per cent, but would not reach eight per cent. She said it was too early to estimate the figure, which will be revealed when the city releases its budget in the fall.

Bernard Côté, chief evaluator and head of the city’s tax assessment department, explained that if a resident’s property valuation rises more than the average in their region, they could see a tax increase. Normally the city will spread out any tax hikes due to increased valuations over three years to ease the financial pain. In 2007, when the increase was 38.6 per cent, the city spread any increases over four years.

Residents of boroughs and demerged suburbs where prices have risen the fastest, particularly in the West Island, could see tax increases. For the agglomeration of Montreal, which includes the city of Montreal and the 15 on-island suburbs, the average value increase was 32.4 per cent. For Montreal and its 19 boroughs, the average increase was 31.4 per cent. The on-island suburb Montréal-Est saw the largest increase in values at 52.5 per cent, largely due to its large industrial base; industrial valuations were up 60.5 per cent overall on the island.

Senneville saw an increase of 45.9 per cent, and Dollard-des-Ormeaux 45.1 per cent. Montreal West, Ste-Anne-de-Bellevue and Baie-D’Urfé all saw hikes above 40 per cent.

Montreal boroughs that saw the highest hikes include Lachine (42.6 per cent), Pierrefonds-Roxboro (40.8 per cent) and St-Laurent (39 per cent). Most boroughs saw a rise in values of 30 to 35 per cent. Ville-Marie had only a 15.7-per-cent increase due to its high level of commercial buildings and office towers, which suffered during the pandemic.

“As Montrealers, we are experiencing anxiety because of this,” said Aref Salem, leader of the Ensemble Montréal opposition party. “We know there is going to be pressure on the taxes in the city, there will be pressure on new owners in the city. … For elderly people living on fixed revenue, it will be a problem for them. And especially, if we go to the industrial field, we know there is an increase of 60 per cent in the roll …  so I don’t know how Montreal will stay attractive for industries and economic development.”

Salem criticized the administration for not giving an indication of the coming tax hike. He said a rise of three per cent would be reasonable, given that most of the city’s expenditures are on personnel and salary hikes were capped at around two per cent in recent collective agreements.

The total value of the 502,789 properties assessed for tax purposes grew to $526.3 billion, an increase of $142 billion over the last roll. The increase is caused by the addition of new buildings, the improvement of others and rising real-estate prices.

The value of residential buildings with two to five units (plexes) increased by an average of 35.6 per cent, while buildings with six or more units went up by 35.1 per cent. Non-residential buildings increased by an average of 23 per cent, with office towers seeing a 6.5 per cent rise in prices. Malls battered by the pandemic saw their valuations drop 2.1 per cent, while industrial buildings saw the highest increase, at 60.5 per cent.

The areas with the highest average prices for homes were Westmount ($2.6 million), Outremont ($2.1 million), Hampstead ($1.96 million), Mont-Royal ($1.94 million) and Ville-Marie ($1.5 million).

The tax roll includes 14,274 single-family homes evaluated at more than $1.5 million.

The highest valued single-family home listed on the roll was $32.6 million, while the property commanding the highest value was the Centre hospitalier de l’Université de Montréal, listed at $1.97 billion.

Valuations are supposed to reflect the market value of properties. They are calculated by comparing real-estate sales in different areas, rental revenues, depreciation of aging buildings, construction costs for new buildings and other factors.

The valuation rolls for all properties can be seen at montreal.ca.