August 19, 2015

Albertans need relief from skyrocketing property taxes

Paige MacPhersonAlberta CTF Director

Chris and his wife were floored when they found out the property taxes on their Calgary home increased by 20.9 per cent this year.

The couple bought their home in 2012. Though it had been renovated that year, and the assessed value rose substantially at that time, they’ve since made no changes to the home or property. Yet this year, the assessed value and property tax bill spiked again. Though the house was only renovated once, they were hit with huge assessment increases twice.

When they tried to appeal or speak to anyone at the city who could answer their questions, they got nowhere. To them, it seems there’s a disincentive to submitting permits for renovations, if this could happen years down the road. It became clear that making ends meet would be increasingly difficult for this young family.

Fed up, Chris contacted the Canadian Taxpayers Federation (CTF.) He wasn’t alone. Unfair property tax hikes are the number one reason why Albertans have contacted the CTF in recent weeks.

Renovations, sales in your area and any neighbourhood changes can impact your property tax bill -- meaning they catch many people off guard, leaving them struggling to pay the bills.

If the premier is willing to listen, there is a solution. Albertans need a municipal property tax cap.

A property tax cap could limit property tax increases to no more than the rate of inflation. It would freeze the assessment and only allow the rate to grow by the level of inflation. Once the house was sold, the assessment would change to reflect the new market price and then be frozen again.

The rate of inflation was one per cent this year. Compare that to Chris’s family’s surprise 21 per cent increase.

Sue and Larry are seniors on fixed incomes, based in Edmonton. Their property taxes are snowballing out of control. Though they contacted their mayor, councillor and provincial representatives, they received no answers. They simply want the financial ability to stay in their home.

A property tax cap would help seniors, persons with disabilities and anyone on fixed incomes, who are hit hardest by unexpected property tax hikes. It would offer predictability and allow people to budget for tax increases.

Changing the property tax structure would involve the provincial government amending the Municipal Government Act. Municipal Affairs Minister Deron Bilous recently said he’s planning to look at the act anyway. What more perfect time?

Small businesses are also impacted by unpredictable property taxes. Their rates should be brought in line with homeowners’ and increases should also max out at the rate of inflation.

Escoba Bistro owner Darren Hamelin hung a giant “For Sale $4.7 million” sign on his storefront - the value at which the city of Calgary assessed his small business, after slapping him with a 97 per cent property tax increase. Hamelin hung the sign to protest the assessed value, asserting there’s no way his bistro would sell for $4.7 million. Yet he’s stuck with the tax hike. He told the CTF that his business is already stretched to the limit. Where is the money supposed to come from?

Another small Calgary business, employment management company PEO Canada, saw a 265 per cent property tax increase this year. (Yes, you read that right.)

Both properties were assessed based on land valuation of previous sales, which vary dramatically.

The chief operating officer of Geophysical Service Inc. told the CTF that the 47 per cent property tax hike to its Calgary office this year was a major hit on top of new city-funded bike lanes severely limiting customers’ access to the business.

For all three businesses, the city’s suggestion to appeal amounts to time and money they don’t have, spent on wading through piles of red tape.

It's time Premier Rachel Notley stood up for homeowners and small businesses, and set the rate of inflation as the maximum property tax increase municipalities can impose.


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commented 2015-08-25 01:52:29 -0400
Thanks, Liza. It’s a screwy system, and most simply give in rather than fight. I happen to know a bit about how the process works and was able to guide my parents through it, but not everyone has such knowledge or resources, and the system can appear very overwhelming for the uninitiated.
commented 2015-08-20 21:41:55 -0400
How much more can Albertans endure? Seems like ever since Notley was elected nothing positive is happening. Paige mentioned that only the Premier can change the Municipality Act, so will she go to bat for these people & do the right thing? Not holding my breath. No rhyme or reason for those egregious hikes in property taxes? Pretty soon, nobody will be able to own a house. Not only are people losing their jobs but maybe also their house. Socialists at work again.
commented 2015-08-20 11:38:25 -0400
All homeowners must be in the 1% to bureaucrats..
commented 2015-08-20 11:03:43 -0400
I am glad your parents were treated fairly Erin. Everything is a formula with those guys, and it can be screwy as heck.
With a Notely government it will only get worse. A cap tied to inflation. while owned, would be a saving grace for Albertans.
Albertans, especially property and business owners are sitting ducks.
commented 2015-08-20 01:31:30 -0400
I don’t know anything about the examples referenced here, but my parents had no problem appealing an excessive property tax assessment this past year. They recently downsized by selling our old house and simultaneously bought a new, smaller home in July 2014. Let’s just say the purchase price they paid was “$X” and that their property tax assessment (as of July 2014, as stated on the notice) was “$X + $50,000”. Obviously, this had to be a mistake, and so they appealed and won. It was not really that difficult. The assessments are supposed to reflect fair market value (FMV), but unless the house actually sells, the municipality has to apply various mathematical calculations based on averages in the same neighbourhood that have comparable features in order to figure out what FMV should be. Sometimes they’re wrong, and in our case they admitted it.
commented 2015-08-19 16:20:41 -0400
The Socialist Agenda to divest ordinary folk from ever owning property!
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