What do annual property tax hikes actually mean for the average Winnipeg tax bill?

It's a plain bungalow on a nondescript street, but it represents the average Winnipeg home.

CBC Manitoba took a deep dive into the history of this house's property tax bills to wrap our heads around how the increases impact you.

Each year since Mayor Brian Bowman took office in 2014, he's hiked the rate by 2.33 per cent — and this year is no different.

But in the grand scheme of things, what does that actually represent over the life of a house?

CBC picked a home that fits the average. Its assessed value has basically mirrored the average home in Winnipeg for as long as online tax data is available.

Back in 2002, this small south Winnipeg house — just under 1,000 square feet — was assessed at a value of $93,000.

That's now tripled to $290,000.

Like most homes in Winnipeg, a huge part of that growth happened eight years ago during a real estate boom — and when the province forced the city to start assessing home values more often.

Before 2010, property assessments happened every four years.

But when real estate skyrocketed, the gap between assessed value (what the city says it's worth) and market value (the value based on an average sale price, according to MLS-only data) got so big the province changed the rules to require assessments every two years.

As a result, most assessment values nearly doubled overnight between 2009 and 2010. Our average home was no different, jumping from $122,000 to $208,000.

For 9 years, tax bills barely changed

Despite that growth, this home saw its tax bill barely change for almost a decade — at least its municipal portion.

The politically popular "tax freeze" saw this home's city tax bill go from $1,250 in 2002 to only $1,431 in 2011 (the year the tax freeze ended).

That's an increase of $181, well below what you would expect if taxes followed the rate of inflation.

But it's important to remember that about half of a home's tax bill isn't controlled by the city.

School divisions tax properties as well — and the city has the unfortunate task of collecting it. This sometimes leads to misdirected criticism.

For our average home, the school taxes are paid to Louis Riel School Division.

Back in 2002, the division billed our homeowner $830 in school taxes. The province also charged them $325 for an education tax that stopped in 2006. That total comes to $1,155.

By 2018, the school tax climbed to $1,740.

Still, there's some relief. A growing provincial education property tax credit meant the net amount paid by the homeowner was basically cut in half each year.

The province has not increased the tax credit, though, from its $700 amount since 2011.

What about the 14-year tax freeze?

There has always been a great deal of misunderstanding over the so-called municipal property "tax freeze," which lasted 14 years.

The municipal property "tax freeze" never applied to your utility bill, frontage levy or school taxes. Overall payments to the city continued to rise during the freeze.

The city says that when the tax freeze was first established in 1998, a baseline property tax revenue target was set for the entire pool of existing properties in the city.

At the time, reassessments only occurred every four years — so throughout the next four-year cycle, both the assessed values for that pool of properties and the mill rate (the amount of tax payable per $1,000 of taxable assessed value) remained unchanged.

However, city property tax revenues still rose during the freeze because the tax base continued to grow — through new home builds, renovations and subdivisions.

When the next reassessment year hit, the pool of tax-frozen properties was enlarged to include all the newly added developments. This new pool was then reassessed and a new mill rate was set, once again based on the city's target for tax revenue during the four-year cycle.

Under the administration of Mayor Sam Katz, the tax freeze thawed in 2012, when a property tax hike of 3.5 per cent was approved by city council.

"It comes to a point in time [when] it's just no longer realistic if you want to maintain the services," Katz told reporters at the time.

Utilities, levies behind greatest increases

While most of the focus tends to be on the property tax increase, the reality is increases related to frontage levies and utilities (utilities are not technically part of your tax bill) have been the main driver in the total city expenses for our case-study home.

In 2002, the frontage levy — a per-foot fee based on the size of the front of lots — for this home was $140, but last year it was $300.

Because utility payments are not publicly accessible, the amounts for this house were calculated using a baseline average which assumes a family of four in the house would consume 240 cubic metres of water annually.

Using these figures, this home's water and sewer bill was $525 in 2002. Today that bill — which now also includes an annual $58 garbage and recycling fee — is nearly $1,400.

What's the big picture?

First, the case-study home has seen total increases in its city taxes, levies and utilities of anywhere between $65 and $217 annually.

Second, the city is increasingly relying on higher utility fees to make up for revenue shortfalls. In 2002, utility costs accounted for just over 25 per cent of our average homeowner's city bill. Today, that proportion is 40 per cent.

Third: play the body, not the puck.

Focusing on the city property tax in isolation provides only limited context to how a homeowner's tax bill has evolved over time.