TORONTO - The agency that assesses houses for tax purposes in Ontario said Wednesday that property values in the province had jumped 20 per cent in the three years since they were frozen by Premier Dalton McGuinty's Liberal government.

The Municipal Property Assessment Corporation said property taxpayers would see an average assessment increase of five per cent next year as the 20 per cent hike is phased in over the next four years.

The government said it wanted the four-year phase-in period for any increases "to add stability and predictability" to the assessment process.

"There are some that would still like to freeze it, but unfortunately that does lead to greater changes down the line," Finance Minister Dwight Duncan said in an interview.

"The freeze did allow us the chance to review all the options and seek public opinion."

MPAC, a non-profit agency funded by municipalities, said it will mail out assessment notices for almost 4.7 million properties this year, and they should start arriving in mailboxes as early as Thursday.

MPAC insisted that an increase in assessment would not automatically translate into an increase in property taxes, which are set by local municipalities.

If the assessed value of a home has increased by the same percentage as the average in the municipality, there "might" be no increase in property taxes for that homeowner.

"If it's gone up by the average result in the municipality there isn't an assessment-related tax increase, all things being equal," said Larry Hummel, MPAC's vice president of property values.

The assessment values are based on actual sales and trends in real estate markets across the province, Hummel said in an interview.

"We analyze all of the transactions that occur," he said. "And we determine what factors are influencing prices," which range from lot size and square footage to swimming pools and proximity to busy highways.

The four-year phase-in program would not apply to anyone who sees a drop in their property assessments - those homeowners will have the full amount applied to their 2009 assessments.

Duncan said he was confident the new system would reduce the number of consumer complaints about MPAC and make it easier for everyone.

"It strikes, I think, as the right balance," he said. "This should help people deal with it and at the same time keep assessments reflecting proper values, do all the things that current value assessment is supposed to do."

This year's assessment notices were redesigned to make them easier to understand and to provide more information to help taxpayers decide if their assessment is accurate, said Hummel.

The notices will include the assessed value of the property for each of the next four tax years and list the percentage by which it has increased or decreased since the last update in 2005.

MPAC vowed to improve customer service and correct any errors in assessments. If a homeowner feels their property would not have sold for the assessed value on Jan. 1, 2008, they can call the non-profit agency.

"If a mistake has been made, we'll fix it," vowed MPAC President Carl Isenburg.

Ontario has adopted a four-year cycle for property tax assessments, which means MPAC's next notices to homeowners will come after Jan. 1, 2012.