Is PVSC Vindictive?

Imagine for a moment that you have appealed your assessment and PVSC told you they thought your assessment was fair but it is clear to you that they really didn’t give your property a fair examination (this is a common complaint. One person appealed and the assessor simply drove past stating later that he stood by his assessment) but that is a story for another time. 

For now assume you have decided to appeal further to the Assessment tribunal which is your right and, in fact what you should do. Anyone who accepts PVSC’s assessment without question is simply asking to have his/her pocket picked at tax time.

You have prepared your case well. You have comparable property sales that are all lower than your assessment. You present your case methodically and carefully. The chairman of your hearing compliments you on your appeal.and rules in your favour. Great you can sit back and relax – or can you.

Next year PVSC raises your assessment despite the fact that property values are dropping. It’s small increase so you let it slide.Next year, however, PVSC raises your assessment by a huge amount well over the Tribunal’s corrected assessment. What is happening here? One thing that isn’t happening is any semblance of fairness.

Here is an actual example.

In 2011 the land value of a property is assessed at $195,000. The owner appealed and received a judgement reducing the property valuation to $150,000.

In 2012 PVSC raises the assessment to $153,000. The property owner does not appeal figuring it isn’t worth the effort even though he knows similar land values are dropping.

In 2013 he is assessed at $165,000. He has still not had the hearing for his 2012 assessment and PVSC is happy with their valuation (and probably happier that no appeal has been heard).

Clearly the Tribunal ruling doesn’t amount to much if PVSC is going to raise the assessment the following year on a whim in what looks suspiciously like a vindictive action.

You can almost hear them,” We can’t allow this guy to get away with this so let’s stick it to him later.” And they do. But they don’t stop there, they raise his house value as well even though house values for similar houses are dropping like stones.

The lesson is that you must appeal, appeal again and again and again etc. etc.. PVSC doesn’t even have to get off their dead behinds to raise your assessment and probably laughs themselves silly at how they have stuck it to you.

Many people have written to me saying how courteous PVSC employees were but than followed up by saying they thought they had been screwed. Well, they probably were screwed. PVSC can afford to be nice because, by law you have to prove they are in the wrong. 

Meanwhile, your municipality  which owns PVSC sits by complacently reaping the benefits of high assessments while paradoxically, ignoring low assessments.

So much for a “Fairly valued Nova Scotia” 

Tax Alternatives

The Diary’s Attempt to Tie Your Knickers in a Knot

Recently a man was complaining to me about his property taxes. His point was that he didn’t get any more services for his highly valued  home than someone with a home of much lower value. It is a common complaint among those who are well to do.

By coincidence I was reading an article about the various types of taxation and the writer touched on this topic. His point was that we accept graduated taxation that is adjusted to suit income out of self interest with a tinge of greed.

He pointed out that if we taxed everyone equally for services the low income people would be forced to leave and the upper income people would be forced to perform their own dirty work or, if they didn’t want to do their own gardening or menial work, they would have to pay more to get it done. If they paid more the low income people might stay and be able to pay their taxes. Of course, the wealthy aren’t about to pay more than they can get away with so that is unlikely to happen.

Henry Ford was once asked why he paid his employees so well. He responded, “If I don’t pay them well they won’t buy my cars.

This was how the middle class  came into being – out of self interest. You can’t get wealthy if there is no one to buy your products or services so it benefits the business person to pay his help better so they can buy his products for which he charges for their labour plus a profit.

So the most logical form of municipal  taxation is not property taxes which, if they were equitable would be so expensive to administer as to make them useless but an income based system that would piggy back on the current income tax system.

How then to tax non residents? The obvious method, since income tax records from another country could not be trusted or easy to come by is to tax them at the highest rate. It is, after all not our responsibility to see to the welfare and wealth of another country’s citizens. If they want a tax break in Canada they should be willing to pay for the privilege.

Corporations are another issue. We all remember (or maybe you don’t)   how the greed of corporations led to the economic crisis in 2008. Clearly there is no hope of ever being treated fairly by corporations with legions of lawyers and accountants dedicated to the  proposition that there is no such thing as excessive wealth. The answer is simple, Tax corporations on their gross income. Don’t give them the opportunity to weasel out of their obligations before they pay for public services that  make their wealth possible. Things like roads, airports, police protection, fire departments etc.

A radical concept. You bet. But, before you condemn it read Joseph Schumpeter’s Capitalism, Socialism and Democracy.  His take on the dangers of rampant capitalism make fascinating reading.

Property Tax Reform

The more I study Property taxes and the property tax system the more absurd it seems. But what are the alternatives. All suggested alternatives are flawed in some way. The problem is finding a system that would keep people happy.

Happily all that is solved today (after a few beers) the Diary formulated an almost perfect tax system based on horse racing’s “Claiming Race” system. (And I laughed when my daughter said she wanted to be a horse veterinarian) We can learn from almost everything on life and if horse racing has a better method of valuing properties (horses) we should pay attention.

Property Taxes and the Chamber of Commerce

The Nova Scotia Chambers of Commerce are calling for a full revamping of the municipal tax system and in particular the outdated, inequitable and capricious property tax system that only serves to keep assessors and their supporting bureaucrats employed at a cost of over 16 million dollars every year. For our 16 Million we get nothing but erroneous assessments, frustration and a confrontational  atmosphere that is encouraged by the failure of municipalities (who own PVSC) to act in the public’s best interest by appealing inappropriately low assessments and by not demanding that PVSC improve its delivery of services.

You can read the Chamber’s report at http://www.nschamber.ca/Municipal%20Taxation%20Oct%2015%202012.pdf

There is much more than just a recommendation for eliminating the property tax. This quote from the report sums up the immediate issue for the average property owner .

“That property assessment as a measure of cost recovery for municipal units be eliminated and that the province of Nova Scotia seriously investigate the use of either the HST system or income tax or a flat tax or some combination of all three as a means to eliminate property taxes over a ten year period in order to meet the characteristics of a good tax. This will also serve to produce savings by not valuing property any longer and lower costs of administration in collecting taxes.”

Here in Queens our government is facing serious problems with revenues. This is no surprise. The question is whether or not the region will pursue inappropriately low assessments. By not acting they leave the quality control of PVSC to the public when it is their responsibility duty to monitor the body they own.

Unfortunately the public has been slow to react to the problems with property taxes and blithely pays their taxes without question. PVSC admitted to me that more than 30% of all properties are improperly assessed and yet only 2% of owners appeal. well I guess the remaining 98% get what they deserve.

Clearly our Stupidity Surplus has reached pathological proportions.

If you have appealed and want help you need only write to the Diary and we will provide assistance (short of representing you at the Tribunal hearing) at no charge.

 

How Good is Your House?

Have you read your property report? If not you might want to. What it says – or more importantly – what it doesn’t say – may have an important impact on your property taxes.

In this case the issue is the quality grade of your home.  On page two or three of your report  it will rate your house at a quality level such as  ”Fair” or “Good” or whatever.  There is a problem with this.

When your house is assessed it is first assessed as if it is “Average” quality. Then the assessor multiplies that by factor based on his/her “opinion” of the actual quality. There are 18  Quality levels (bet you didn’t know that). The following table shows them all with the right hand column showing the multiplier. So if your house is “Average” the value is multiplied by 1.0. If it is “Good” it is multiplied by 1.26. If it is “Fair” it is multiplied by 0.78  and so on. (This information was supplied by a reliable source in PVSC who said nothing about its being confidential.)