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Frequently Asked Questions from Property Owners

This section is designed to offer general guidance for municipal elected officials and administrators to answer common questions from property owners regarding property assessment and taxes.

  1. What are my property taxes used for?

Your property tax bill generally consists of two major items: (1) municipal taxes and (2) provincial education property taxes.

  1. Municipal property taxes are set by the municipality to pay for local municipal services such as road maintenance and snow clearing, street lighting, parks and recreation facilities, police and fire protection, land use planning and community programs.
  2. Education property taxes are charged by the Government of Alberta. The municipality collects the tax on behalf of the province and forwards it to the Government of Alberta to pay for primary and secondary education delivered by school boards across the province.

In some communities, the property tax bill may include a tax to fund the operations of one or more community organizations such as seniors housing.

  1. How is the value of my property determined?

It depends on the type of property. If your property is residential or commercial property, it is likely assessed using the market value standard, which estimates the value your property would likely sell for on the open real estate market between a willing buyer and seller. In most cases, this value is determined through a comparison of similar properties and recent sale prices. If sales data is not readily available for a particular property, an assessor may also use an income approach or cost approach to determine its market value.

If the property is farmland, machinery and equipment, railway or other linear property, then it is assessed using a regulated procedure based standard. This method requires the Government of Alberta to prescribe rates and procedures that allow assessors to determine an appropriate assessment value for the property.

  1. What factors will affect the market value of my home?

Factors that may affect residential market value include the total finished living area, quality of structure, age of structure, level of modernization, building type (i.e. duplex, etc.), structure type (i.e. bungalow, two-storey, etc.), unit type in condominiums, type and size of garage, lot size, lot topography and access, views from the property and proximity of the property to traffic, greenspaces, community services, commercial properties, multi-family properties, waterways, schools, trains, transmission lines and communication towers.

  1. Why is the value on my assessment notice higher/lower than what my property is worth today?

Your property taxes are based on the value of your property as of July 1 the previous year. This valuation date is set under provincial legislation. As an example, your 2020 property assessment notice will reflect the value of property on July 1, 2019. Changes in real estate market conditions can result in substantial changes in property values between the time of valuation and when property assessments are received by property owners. Those changes will be reflected in the next year’s assessment.

  1. Why is my neighbour’s property assessment higher/lower than mine?

Consider the following factors when comparing the value of two neighbouring properties:

  • Lot size and influences to each lot – i.e. traffic, parks, walk-out lot
  • Type of house structure – i.e. bungalow, two-storey, or split level
  • Size of the house
  • Age and condition
  • Basement development – i.e. finished or unfinished or a walk-out basement
  • Presence and size of a garage
  • Renovations and quality of interior and exterior finishes
  1. How does my property assessment affect my property taxes?

The municipality uses the assessed value of your property to determine your share of municipal property taxes and your share of provincial education taxes.

  1. Why do property tax rates often change each year and how are they determined?

Each year, council will determine the amount of money needed to operate the municipality. The municipality then estimates how much revenue it will receive from sources other than property taxes such as user fees and grant funding. This amount is subtracted from the total amount of money needed and the remainder is the amount the municipality needs to collect through property taxes in order to provide municipal services for the year.

            Example

            Cost to operate the municipality                     $1,000,000

            Less: Revenue from non-tax sources              (300,000)

            Property taxes required                                     $700,000

            Council determines that $500,000 of the $700,000 should be funded by residential property owners.

            Total residential assessment                          $100 million

            Municipal tax rate = $500,000 taxes required ÷ $100 million residential assessment = 0.005

 

The provincial education property tax rate is calculated differently. Each year, the Government of Alberta tells the municipality how much education property tax must be collected from residential property owners and non-residential property owners within the community. This is known as the “education property tax requisition”. The municipality uses that information to calculate the education tax rate.

Residential education tax rate = provincial education tax requisition for residential property ÷ total assessed value of residential property in the municipality

Example

A municipality’s 2020 education property tax requisition is $1,200,000 and the total value of assessed property is $475,000,000. Therefore, the calculation is $1,200,000 ÷ $475,000,000 = a local education tax rate of 0.0025.

  1. How are my property taxes calculated?

Your property taxes are calculated in three steps.

  1. Your municipal property tax is calculated by multiplying the municipal tax rate to the assessed value of your property.
  2. Your education property tax is calculated by multiplying the education tax rate to the assessed value of your property.
  3. Add your municipal tax to your education tax to equal your total property tax bill.

Example

         Municipal tax =                    assessment x municipal tax rate

+ Education tax =                    assessment x education tax rate

= Property tax bill

 

            Municipal property tax =         $300,000 x 0.0060                  $1,800

            Education property tax =        $300,000 x 0.0025                       750

            Property tax bill =                                                                    $2,550

 

Depending on the municipality, your property taxes may also include other taxes such as seniors housing or levies that are specific to the location of your property.

  1. Can I appeal my taxes?

No, you cannot appeal your taxes. Property taxes are based on the municipal tax rates that are applied to the values of all properties in a municipality. You can appeal the assessed value of your property but it must be done during the period specified on your assessment notice.

While a property owner cannot appeal the taxes on an individual property, property owners can contact their municipality’s administration or council to discuss opportunities to minimize the level of taxation on all property owners in the future.

  1. If I do not agree with my property assessment, what can I do?

If you have concerns about the information in your assessment notice, you should contact the assessor. If after having a discussion with the assessor, you are still of the opinion that your assessment is incorrect, you have the option to file a written complaint with the municipality’s assessment review board as long as it is filed within the defined complaint period. Instructions can be found on your assessment notice.

  1. I have filed a complaint regarding the assessment of my property. Do I still need to pay my property taxes?

Yes, you must still pay your taxes by the due date to avoid penalties. If a decision on your complaint results in a lower tax levy, you will be credited the appropriate amount.

  1. Does a change in my property assessment affect my property taxes?

Yes, it can. A change in your property taxes is typically a result of three factors:

  1. Changes in the amount of money required by the municipality’s budget;
  2. Changes in the amount of money required by the province through the education property tax; or
  3. Whether the change in your property’s assessed value is higher or lower than the average change in property values in the municipality.
  • If the value of your property increased by 5 per cent while the average increase in property values in the municipality was 2 per cent, then your property taxes may increase.
  1. Why did I receive a property assessment notice that is separate from my property tax bill?

Your assessment notice was provided near the beginning of the year to give you time to review your property’s assessed value and contact the municipality if you have concerns about the assessment before property taxes are determined. Since you are not able to dispute your property tax bill, you must address any concerns with your assessment notice before the assessment complaint deadline closes.

This approach is not used by all municipalities. Some municipalities send the property assessment notice and the tax notice together. Under this approach, the assessment complaint period is open during the same period that taxes are collected.

  1. Why did I receive a supplementary notice?

You received a supplementary assessment and tax notice because of new construction to your property that was not included in the current year’s assessment and tax notice. You are being taxed on that additional value so that you pay your fair share of property taxes that support municipal services provided to your property in the year. The resulting supplementary tax is pro-rated based on the number of months your newly improved property has been completed or occupied.

Example

A property owner receives their 2020 property assessment notice for $100,000 which represents their vacant lot. In April 2020, they started construction of a new house and they complete it in October. During this time, they pay their property tax on the $100,000 value of their land. At the end of October, they receive a supplementary assessment for $250,000, which represents the value of the new building. Supplementary tax will be levied on the value of the building and is pro-rated for the three remaining months (October to December) of the 2020 tax year.

  1. If Council has approved a municipal tax increase, does that mean my property taxes will go up?

A municipal tax increase means the municipality will collect more municipal taxes, in total, from the taxable assessment base. You may experience a tax increase or decrease depending on how your property assessment has changed relative to the average change in property values. For example, council has approved to collect more taxes from residential properties and the average residential market increase is 2 per cent. This means that if your residential property assessment has increased by more than 2 per cent, you will have a corresponding higher total tax increase.

  1. Will my property taxes increase if I renovate my house?

A significant improvement to a property generally increases its market value, and subsequently its assessed value, because your assessment is based on market value. Improvements such as a new addition, new garage, or basement development will increase your property assessment. Interior renovations may increase your assessment depending on the extent to which the market value has been enhanced.

  1. Are there any property tax programs available for seniors?

The Government of Alberta offers the Seniors Property Tax Deferral Program that allows eligible senior homeowners to defer all or part of their property taxes through a low-interest home equity loan with the Alberta government. If you qualify, the Alberta government will pay your residential property taxes to the municipality on your behalf. You re-pay the loan, with interest, when you move or sell the home, or sooner if you wish.

  1. Can I get information about how my property was assessed?

You are entitled to receive all documents, records and other information in respect of your property that the assessor has in their possession. To receive these records, contact the municipality and they will have a prescribed time period to provide you the information.

  1. How do I get information about other comparable properties?

You are entitled to request a summary of information on properties that are similar to yours. To receive these records, contact the municipality and they will have a prescribed time period to provide you the information.

  1. What are the important dates in the property assessment and taxation process?

The following timeline applies to residential property where the municipality’s deadline for payment is the end of June each year. The timeline can differ depending on the municipality and type of property.

Jul 1

Dec 31

Jan – May

Apr – Jun

Jun 30

Jul 1

Your property is valued based on what it would have likely sold for on the open real estate market as of this date.

 

Any changes in the physical condition of your property as of this date are factored into your property assessment from July 1.

 

Assessment notices are mailed to property owners. You have 60 days to file a complaint as per your assessment notice.

 

Council approves the tax rates and tax notices are mailed to property owners based on the assessed values collected on July 1 of the previous year.

Deadline to pay property taxes is the last business day of June.

 

Municipalities may apply a penalty to any unpaid taxes owing.

 

            Example

Jul 1

Dec 31

Jan 16

May 30

Jun 30

Jul 1

2019

2020

Land and house are valued at $280,000.

 

The assessor notes that a garage was built since July 1. The value of the garage as of July 1 would have been $20,000 so the total 2020 assessment is $300,000.

 

Assessment notice is mailed to property owner with a deadline to submit a complaint by March 24, 2020.

 

Tax notice of $2,850 is mailed to the property owner. The taxes were calculated based on the $300,000 property.

Deadline to pay property tax.

 

Property owner paid the $2,850 of taxes on time so no penalty is applied.