Municipalities (cities, towns, villages, resort villages, and rural municipalities) raise most of their revenue through property taxes.
Traditionally, your property taxes were calculated using the ad valorem basis of taxation meaning that your property taxes increase proportionately with the value of your property.
Property taxes for your school division continue to be calculated using the ad valorem basis. Your tax bill will include both municipal and school taxes. There may also be other special taxes that could affect the total amount of your tax bill.
Tax Tools (mill rate factors and minimum tax)
Tax tools are a mechanism allowing the council to redistribute the cost of public services within its tax base. Tax tools may only be applied to municipal property taxes.
Municipalities have three tax tools that can be used individually or in combinations: mill rate factors, minimum tax, and base tax. The Town of Wynyard uses mill rate factors and minimum tax.
Mill Rate Factors
A municipality may establish a mill rate factor by bylaw to transfer some of the cost of public services from one property classification to another. All property in a municipality is classified as agricultural, residential, or commercial. Mill rate factors essentially adjust the mill rate, with the result that the effective mill rate for a specific property classification may be higher or lower than other property classifications.
To calculate the municipal portion of your property taxes when the council implements a mill rate factor, the ad valorem tax calculation is multiplied by the mill rate factor. If the mill rate factor is greater than 1.0, the resulting property taxes will be higher; if the mill rate factor is less than 1.0, the resulting property taxes will be lower.
By deciding to use these mill rate factors, the council has decided that commercial properties in the municipality will pay a greater share of the cost of public services, relative to residential properties.
A minimum tax may be established by bylaw to increase the amount of tax revenue generated from lower assessed properties within one or more property classifications. The minimum tax will generally be a specified value or amount; however, it may also be expressed in a formula.
This tax policy will reduce the uniform mill rate which will benefit properties with higher assessed values.
Your municipal taxes will be greater than the minimum tax or the ad valorem tax calculation. In other words, you will pay either the minimum tax or the ad valorem tax. For example, let's assume that the municipality has implemented a minimum tax of $400. The mill rate is 10.0 mills and we have two properties - Property "A" has an assessed value of $81,700 and Property "B" is assessed at $13,000.
- Using the ad valorem tax calculation, the municipal tax levy relative to Property "A" is $81,700 x 10.0 / 1,000 = $817. As this amount is greater than $400, the property taxes for Property "A" will be $817.
- Using the ad valorem tax calculation, the municipal tax levy relative to Property "B" is $13,000 x 10.0 / 1,000 = $130. As this amount is less than $400, the property taxes for Property "B" will be $400.
A municipality may pass a special tax bylaw to raise revenue for a specific service or purpose. Public notice is required. The service or purpose must be completed within the taxation year.
Special taxes are added to the tax roll and collected with property taxes. A special tax can only be levied on a property that will benefit from the specific service or purpose stated in the bylaw.
Tax Tools Bylaw