Municipal Affairs and Environment

How Property Assessments are Calculated

Step 1

Overview of Current Assessment Process

The assessment agency (MAA) or division (City of St. John's Assessment Division) compiles data about sales, construction, market conditions, and other relevant information

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An individual assigned value is generated for each property based on its characteristics, calculated by using a standardized valuation method

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The individual value of each property is combined with the market data for the neighbourhood or municipality to generate a market value, or assessment

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The assessment agency or division mails the assessment to the property owner

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Outside St. John's, the MAA delivers the assessment roll to the municipality

What are some of the assessable characteristics?

  • Location
  • Size of building
  • Condition
  • Age and depreciation
  • Lot size
  • Finished basement area
  • Existence of out-buildings
  • Type of construction
  • Commercial features (Rental rates, vacancy rates, etc)

Did you know?

Different valuation approaches are used for residential and commercial properties; based on different factors.

Regardless of the valuation approach, the procedure has the same result: an assessment represents the hypothetical price that a property would sell for, in the open market, as of the base date.

Step 2

Process for Setting a Mill Rate

Step 1: The assessment agency or division assesses all properties in a municipality.

  • The assessment roll is delivered to the municipality
  • The sum of all assessed properties in that municipality is calculated

Step 2: The municipality sets its annual budget.

  • Your municipality will determine what its costs will be for the year to provide things like snow clearing, road maintenance, parks, and other municipal functions.

Step 3: The municipality divides the sum of all taxable assessments in the municipality, by the budget amount which needs to be raised, to arrive at a mill rate.

  • The calculation is always multiplied by 1000 to get a whole number for the mill rate

Calculation

(amount to be raised / total taxable assessment) * 1000 = Mill Rate

Example

($200,000 / $50,000,000) * 1000 = 4 Mills

Step 3

Generation of Municipal Tax Bills

The municipality applies the mill rate to each individual assessment to arrive at a municipal tax bill. The assessment amount is divided by 1000, and multiplied by the mill rate.

We will assume that the mill rate is 4, as above, for the purposes of the following examples.

Annual Municipal Tax Bill Examples

Example 1: A vacant lot worth $20,000
($20,000 / $1000) * 4 = $80 is the Annual Municipal Tax Bill

Example 2: A home worth $100,000.
($100,000 / $1000) * 4 = $400 is the Annual Municipal Tax Bill

Example 3: A large building worth $250,000.
($250,000 / $1000) * 4 = $1,000 is the Annual Municipal Tax Bill

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