Great question! The City budget is divided by the total Assessment Base which, it should be noted, will not only grow from property value market increases, but also from newly created subdivisions such as new condo towers, townhouse developments and every new construction and/or improvement built on a new parcel of land registered at the Land registry office.
For those inclined to know the math behind this impact, here it goes:
Let’s assume a city has an assessment base of $1,000,000,000 this year and the market increases 10%. The new assessment would then be $1,100,000,000.
Added to that would be the above-noted new subdivisions/condo towers/townhouses etc.
Let’s says 1,000 new units were created at $300,000 each.
The Assessment base would then contribute $300,000,000 more to the new base of $1,100,000,000 noted above.
The total Assessment BASE at the time of creating the tax rate/mill rate would then be $1,400,000,000.
Having said all that, each new owner and family to occupy the newly created units will utilize City and Provincial services, send kids to schools, use the hospitals etc. so that the new proposed 2018-19 budget must extend its estimate to cover these 1,000 new units. So it never drops.
This explains the age-old adage that two things in life are guaranteed: Death and Never-ending Tax Increases!….Meaning the Budget will go way up before being applied mathematically to the new Assessment Base.