The Yukon government announ-ced this week that Whitehorse property values are going up, meaning the city could make more money on property taxes.

Kelly Eby is the director of the government's property assessments and tax branch. He said Thursday the Christmas-time announcement follows a pre-determined schedule.

'We do re-assessments on a biannual schedule, so every two years,' he told the Star. 'This year, we're re-assessing properties within municipal boundaries.'

Eby said building improvement costs are combined with land values, based on fair market value, to create a property value. This year, that number has risen for most property owners.

'Each property varies, but the total assessment value has increased in Whitehorse by 16 per cent,' he said. 'But that's not a number every property owner would see their assessment change by.'

The heightened property values do not affect property owners for the time being, but will come into play when the city calculates property tax payments.

'These values are produced for assessment and taxation purposes,' said Eby, confirming the city will be making more money off property taxes because of the heightened value assessments.

'Just because your assessment goes up does not mean necessarily that you're paying higher taxes; that's up to the city tax authorities,' he said.

There is an appeal process for home owners who want to challenge their updated assessments.

Mayor Bev Buckway said the property value assessments are shocking.

'It was quite a surprise to us that the assessments were that high,' she said in an interview.

Earlier this month, the city released a 2008 budget that calls for a 7.5 per cent property tax increase.

Buckway said she wasn't sure when city staff and councillors will sit down to discuss this, but did promise they will take a good look at the entire budget and see what changes need to be made following the government's announcement on assessments.

Mike Racz, president of the Yukon Real Estate Association, said the fair thing for the city to do would be to incorporate these 2007 property assessment figures into the 2008 operating budget.

'It's going to be a hard decision for the city ... you have to be careful,' he said.

Coun. Florence Roberts told the Star today the property value assessment raises are hitting some residents hard.

'I am one of those poor taxpayers too,' she said, referring to the misfortune of the heightened assessments shared by all Whitehorse residents.

'I really think this will have some effect on the budget, at least in my opinion,' she said.

'We just gotta do it, and we'll see after the second reading.'

Changes to the city budget can be made after it receives its second of three readings, as mandated under the city bylaw process.

Property taxes are one of the chief means of income for the city, aside from grants and service fees.

The Yukon Bureau of Statistics reported this month that the price of an average single home in Whitehorse this year is $297, 400 up 16 per cent from $255,100 a year earlier.

City council will meet next at 7:30 p.m. Jan. 7 for a standing committee, with a full council meeting scheduled for the following Monday, both in the council chambers at city hall.