Why The Property Tax Rate Is The Least Of Your Worries...

Things are just getting more and more expensive aren't they?


I know I speak a lot about the housing prices, but regular items like groceries have all seen a big jump in pricing due to the pandemic and "supply chain issues".


But to not be outdone, the City of Calgary also announced that their rates are also increasing.


About a month ago the city announced that their property tax rate is going to increase to 3.87%.


Check out the news release here.


From the article above, it mentions that this increase will be used for the following:

  • $3 million for Calgary's climate action plan

  • $55 million to attract developers to convert empty office buildings to residential units.

  • $16 million for firefighters and the Calgary Police Service

The article also mentions that this change of rate will amount to an increase of $6.20 per month for the average home. The average home price they cite is $457,000.


So all of this is old news, right? At face value, this might not sound like a major increase. It's like one of those commercials, "For only $6.20 a month, you can...."


But is the true impact on a homeowner only going to be $6.20/month? I highly doubt it.


Why? The average price of the home they are using is $457,000. Which was the average home price in Calgary in 2020. Right now the average home price, per CREB is just over $493,000.


The part that isn't mentioned in this article, nor from the city is the house prices they use to calculate our assessments for the year have gone up nearly 8% from last year based on the housing prices.


So an increase of 3.87% is really piggybacking off assessment values that should show an average price across the city of $493,000.


The assessment valuation tool that is used by the city to determine the taxes we pay is very much formulated to cater to taxes needed for revenue. It doesn't, nor has it ever, reflected the current market values for homes in Calgary. They are based on the sales data of July the previous year.


An increase of 3.87% will be on the new assessment values in 2022 will be based on sales of July this year, which as we all know, have been significantly higher than the previous year.


So when that assessment comes in the mail next year, be prepared for higher taxes on average across the city twofold, the rate used and the assessment taken on your home to calculate what you have due.


I hope you found this short update useful. If you have questions or would like to learn the current value of your home, shoot me an email at aly@calgaryareahomes.ca, and let's chat about it.


My business is built on the referrals from my network of readers of these posts, past clients, and referring partners. I'd love to help your friends and family with their home sale or purchase needs. Feel free to share this with them below and I hope we can connect soon.


Happy Holidays!


Aly





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