If you own property in Edmonton you should have received your city tax assessment in the mail recently. You probably noticed your tax assessment is much higher this year than last year.
There is a BIG misconception out there, that if property values go up by say 50%, then property taxes go up 50%.
That is completely false. If it were true, then if property values went down 50% so would taxes and how would the city pay for any services?
So just how are property taxes determined?
The City determines the cost of all services and infrastructure (a.k.a. the budget). About 15% of the budget is covered by fines, permits, user fees, grants, etc. The other 85% is covered by residential property taxes.
The city assesses the value of all the property in Edmonton. The tax rate is determined by the total value of the property in Edmonton and the budget.
Simply put, your assessment x the tax rate = your municipal taxes.
So technically, if your assessment went down, but the city budget went up, your taxes could actually go up!
How your municipal taxes are calculated:
Property tax is made up of a municipal portion, a provincial education portion, and local improvement charges. Local improvement charges apply to about 25% of all properties in Edmonton.
The provincial government determines the amount of education tax each municipality in Alberta will pay. The City is required to collect this tax from property owners on behalf of the province.
How is your property assessed?
Assessors use these factors along with recent home sale statistics to determine a "market value" assessment for residential properties:
- Style of house (examples: bungalow, bi-level)
- Size of lot Size of house (outside measurements)
- Year built
- Basement or lower level finish
- Garage (examples: size, detached or attached building)
- Exterior finish Building condition
- Type of roof
- Fireplaces, air conditioning or other special features
- Site or location influences (examples: golf course, lake, park, ravine, river valley, commercial, institutional, multi-family, traffic)
- Swimming pools and associated buildings
Complete information on the tax assessment is available here.
If you pay your taxes annually they are due June 30.
I suspect the real issue is not that housing values and taxes are perfectly correlated. the real issue is that people holding multiple properties; that are not cash flowing on their own; or that are being paid by the “investor” using their line of credit to make payments; just got yet another factor eroding their “returns”.
The city should have a system to inspect and thoroughly review properties every few years. In my experience, 65% of the SFH in Edmonton have finished basements or garages etc. etc. that have been constructed after the initial build and are not reflected on assessments. If homeowners who have obtained permits for these items or had the original builder supply basement fininshings and garages etc. etc. are paying higher taxes, doesn’t it seem unfair that so many who have ignored the legal steps and not informed the city of such improvments are not being assessed for the same items?
Here is the city website that shows you the market value assessment for any property in Edmonton: http://maps.edmonton.ca/
After you enter the site, go to the “Residential” pull-down at the top left of the page, and select “Assessment”. Then enter the address of the house you are interested in. Make sure you select NW or SW appropriately.
It’s amazing to see sellers claim “professionally finished basements” in their listings, while the City website states that there is no basement development on record. It probably means you are getting a “professional” basement without permits…..
The website also helps you locate neighborhoods or named locations, which might be helpful for newcomers to the city.
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“Cut spending or face another hefty tax hike, council heard last week.
A city report warns inflation alone could tack another 9.4 per cent onto the average tax bill.
The number leaves no room for population growth or new services.
Most of the increase comes from wage increases, general inflation and debt servicing.”
http://www.edmontonexaminer.com/ArticleDisplay.aspx?e=1058271&auth=Joelle+Tomek+(Examiner+staff)
It seems there’s a possibility of a significant tax increase.
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