Property Taxes

This budget process allows City Council to identify where the money is needed most and helps determine the budget to meet those needs. As part of this process, the City considers where the money to cover municipal programs and services comes from. One of the revenue streams for any municipality in Canada is property taxes.

Once the amount of money needed is determined, City Council calculates the tax rate needed to provide the City with enough money to balance the budget.

Check out the video below to find out how assessment and municipal taxation works:

At the December 6, 2021 Regular Council meeting, Council approved the 2022 Operating Budget with 2022 municipal tax levy of $26,204,110. This total is based on the 2021 municipal tax levy of $26,054,110, plus estimated growth of $150,000, resulting in a municipal tax increase of 0%. However, this approved 2022 budget did not include the education property tax requisition since the province provides the education requirements with their budget each spring.

As a result of the 2022 provincial budget, there is a 2% increase in the 2022 requisitions from $7,772,098 to $7,929,374. The education requisition separates out different amounts to collect from residential properties and from non-residential properties. Both residential and non-residential properties experienced an increase to the requisition increased by 2%.

How the Education Property Tax is Calculated

Every year the province calculates, based on assessment value, the amount each municipality must contribute towards the public education system. The City collects these taxes and distributes them to the provincial government. City Council has no control over the amount of education tax collected.

Your share of the education property tax payment is based on the assessment value of your property and the local education property tax rate.

Why is education partially funded through property tax?

The education property tax provides Alberta’s education system with a stable and sustainable source of revenue. Pooling the education property tax in the ASFF ensures that students receive a quality education regardless of their municipality’s assessment wealth.

Does everyone pay the education property tax?

All property owners pay the education property tax (with some exceptions, such as some non-profit organizations and seniors’ lodge facilities). People who rent or lease property may also contribute indirectly through their monthly rent or lease payments. As the education system benefits all Albertans, people without children in school also pay the education property tax.

Every Albertan benefits from a quality education system. The education property tax supports an education system that is producing the workforce of tomorrow.

What does this mean for my property?

A 2% increase in the education requisition does not translate into a total tax increase of 2%. The education tax is only one portion of the property tax bills. In addition, new growth properties will also contribute taxes to cover the education increase and reduce the impact on existing properties. Although it is too early for definitive numbers, the likely impact of the increase in the education requisition is 0.36% for residential properties and 0.24% on non-residential properties. Non-residential properties will be slightly less impacted by the increase in the requisition due to a higher level of assessment growth in 2021.

Until Council sets the 2022 tax rates in April our owners won’t know exactly the amount of taxes owing for 2022, however an estimate of the education impact are shown in the table below:

An incentive allowance is applicable to all monies received up to and including January 31st of the current year as a prepayment of future taxes for the current year. The amount of money received as prepayment shall be limited to an amount equal to the previous year’s current taxes, other than local improvement taxes. (The property owner can only prepay an amount equal to or less than the amount of their prior year's property taxes and have the incentive apply.)

The incentive allowance is then calculated and credited to the respective tax account at a rate of 1.5% on the prepayment amount.

Example:  If your property taxes for the previous year were $3,200, that is the amount you could prepay prior to January 31 (of the current year) to which the 1.5% incentive will apply.

However, if your property taxes were $3,200 last year and $3,000 of that amount was for property taxes and $200 was a payment toward local improvements, only $3,000 of a prepayment towards your property taxes would qualify for the incentive.

If there is new paving or concrete done along property frontage, you can choose to pay your portion of that cost off annually with your property taxes. (This amount, when included with a ratepayers annual property taxes, is called a local improvement tax.)

(This incentive is not available to Tax Installment Payment Program participants.)

Further details can be found in the Property Tax Penalty and Incentive Bylaw 3114-20 or you can contact the Financial Services department at 780.672.4426.