Your Tax Assessment Does not Reflect Your Current Market Value

Recently the city of Edmonton sent out notices to Edmonton home owners about their tax assessments. We are getting a lot of questions about this – many home owners want to know how much the average prices have changed since July 1, 2008, when their property was assessed by the city.

First off, the value of your home does not go up or down at the same rate as the overall average sale price of Edmonton homes. Over the past year, buyers have been buying larger homes for less money, so the overall average has not (in general) dropped as much as the value of individual homes. Second, your assessment does not necessarily reflect the true market value of your home.

Here is a segment from an article we posted last July about assessments:

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.