Would updated MPAC assessments lead to skyrocketing property tax hikes?

As Windsor city councillors prepare to hear from residents about the proposed 2025 budget, homeowners are likely receiving property assessment letters in the mail.

The Municipal Property Assessment Corporation (MPAC) determines the assessed value of properties based on their current market value as of a specific valuation date.

MPAC typically conducts property assessments across Ontario every four years, but the COVID-19 pandemic in 2020 put that process on hold.

As a result, homeowners in the province are paying property taxes based on 2016 assessment values.

According to historical data from the Windsor-Essex County Association of Realtors, the average sale price for a home at the end of 2016 was $220,053.

By November 2024, that figure had risen to $584,482 — a 165 per cent increase.

Some residents may assume that such a sharp rise in property values would lead to an equivalent increase in property taxes once MPAC conducts new assessments.

But that's not the case. Here’s how it works:

When MPAC updates property assessments, it doesn’t directly determine your property tax bill.

Instead, taxes are based on your property’s value relative to others in your municipality.

Under the proposed 2025 budget, the city plans to collect $499,614,326 in property taxes to fund services like police, transit and waste collection.

This amount, known as the tax levy, includes a proposed 2.99 per cent increase from last year.

According to Windsor's finance commissioner and city treasurer, several factors contribute to the tax levy increase. These include legislated changes from upper levels of government, rising costs for mandated programs and services, and inflationary pressures.

"We also have a lot of other contractual obligations that have built-in inflationary factors," said Janice Guthrie.

"We have utilities, water, gas, and we also are subject to increases in the construction price for our capital projects, so some of those initiatives have to go up."

Now, imagine MPAC reassesses all properties in Windsor. Recall the 165 per cent jump in home prices between 2016 and 2024.

A for sale sign in Windsor, Ont., on Tuesday, April 25, 2017. (Melanie Borrelli / CTV Windsor)

While that might sound alarming, it doesn’t mean the city will collect 165 per cent more in taxes. The tax levy remains fixed at $499,614,326, regardless of rising property values.

What changes is how the tax levy is divided.

If your home’s value rose at the same rate as the citywide average, your tax bill would remain largely unchanged.

However, if your property’s value grew significantly faster or slower than the average, your share of the taxes could increase or decrease accordingly.

"For example, if somebody's doing a renovation or if they've added something to their house, MPAC is still keeping track of those things and they will change the value on individual properties based on those things," said Jesse Helmer, senior research associate at the Smart Prosperity Institute.

"That's why some people might see property tax increases than what's reported in the news. That's probably because there's been a specific change on their property that got caught by MPAC."

In simple terms, the city adjusts tax rates to collect only what it needs, regardless of rising property values.

While updated assessments might seem daunting, they’re a way to distribute the tax burden fairly — not a recipe for skyrocketing tax bills.

Public delegations on the proposed 2025 city budget are scheduled for Jan. 13, with official budget deliberations set for Jan. 27.