The assessment agency (MAA) or division (City of St. John's Assessment Division) compiles data about sales, construction, market conditions, and other relevant information
An individual assigned value is generated for each property based on its characteristics, calculated by using a standardized valuation method
The individual value of each property is combined with the market data for the neighbourhood or municipality to generate a market value, or assessment
The assessment agency or division mails the assessment to the property owner
Outside St. John's, the MAA delivers the assessment roll to the municipality
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 1: The assessment agency or division assesses all properties in a municipality.
Step 2: The municipality sets its annual budget.
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.
(amount to be raised / total taxable assessment) * 1000 = Mill Rate
($200,000 / $50,000,000) * 1000 = 4 Mills
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.
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