Bridget Deacon and Lowell MacDonald of Keller Williams say some people who are purchasing homes are getting a big surprise when they get their next tax bill.
“The tax department is going to reassess the property off the sale price,’’ MacDonald told The Guardian recently.
Bridget Deacon and Lowell MacDonald of Keller Williams say some people who are purchasing homes are getting a big surprise when they get their next tax bill.
“The tax department is going to reassess the property off the sale price,’’ MacDonald told The Guardian recently.
Deacon said it’s a problem that is catching many off guard.
“The problem is the average home owner doesn’t realize when they purchase a property, if it hasn’t been assessed since 1992, chances are their taxes are going to double, if not triple,’’ Deacon said.
Deacon and MacDonald used to be with Century 21 before opening up a brokerage business in P.E.I. Keller Williams has five Realtors in the province now.
Deacon said when a property is advertised the tax price is listed as it is now. When the property is assessed by the province, things can change.
“You’re going to get reassessed, and the assessment office is going to use the purchase price as a jumping off point,’’ she said.
Taxes for rental properties can jump anywhere from $9,000 to $20,000, depending on the property, she said.
No one from the province’s taxation and property records division could be reached for comment.
“It’s something the public is not very aware of. It’s very important because it also affects financing,’’ Deacon said.
She said it can slam many home buyers in the pocket book.
As an example, Deacon talked about a first-time home buyer. They’re in the market for a $100,000 home and manage to scrape together a $5,000 down payment. They’ve also got student loans, car payments and a host of other responsibilities.
“If you get approved for $100,000 with five per cent down and then your taxes double, you’re in way over your head for payments. It’s really going to affect your debt-income ratio and it’s going to affect what you can do. You can’t go and borrow to fix the roof, for example, if you need to do that because you’re over your debt-income ratio for borrowing.’’
So, two people on the same street with the exact same house could be paying tax bills that are vastly different, all because one home owner purchased a home that hadn’t been assessed since 1992.
“Can you imagine getting a double tax bill on your property? Another $100 or $200 to your budget every month is quite a bit.’’
