Homeowners in Calgary are bracing for an even higher-than-expected property tax increase this year, with Calgary Mayor Jyoti Gondek blaming the significant hike on the provincial government.
Calgary City Council approved an 8.48% property tax increase for single residential homes. While assessment value has increased by 9.91%, municipal taxes increased by 6.66%, and provincial taxes increased by 12%, resulting in the total tax value rising by $309, or $26 per month.
Condo owners can expect a lesser monthly increase of $20, a 14.18% increase from 2023. High-rise apartments will see a 7.96% increase since last year.
This adjustment follows the city’s recent assessment of property values and the announcement of the provincial budget.
Every November, city council finalizes the municipal budget, yet it hinges on the release of the provincial budget in February to ascertain the municipality’s financial obligation to the province for its share of the education tax requisition.
The municipal portion of the property tax saw a slight decrease from the initially projected 7.8% to 7.2%, thanks to higher-than-expected growth in property assessments. However, this relief was offset by the 12% increase in the provincial education tax requisition, which the Calgary city council said was the reason for the hike in the provincial government’s portion.
While Mayor Jyoti Gondek placed some blame on the provincial government for the tax increase, Alberta’s minister of municipal affairs, Ric McIver, said Calgary’s increase in property taxes has “nothing to do with the provincial government.”
“The education property tax is an important revenue source that helps support the growing population of students and the need to build new schools, hire new teachers, and education assistants,” he said.
He added that the education property tax rate is set by the province and remains the same as it was in 2023.
The Alberta government’s website confirms the freeze but shows that growth in property values and increased development will result in education property tax revenue growing by $229 million in 2024-25.
The revenue increase will help mitigate the cost pressures of rising enrolment, said the province. The proportion of education operating costs funded by the tax will reach near-historical levels of 30%.
Commercial property owners will also see an increase, with the municipal and provincial portions of the non-residential property tax rate increasing by 3% and 3.8%, respectively, equating to an additional $276 monthly for a commercial property valued at $5 million. The tax burden distribution adjusts to 53.2% for residential and 46.8% for non-residential properties.
The distribution will result in Calgary’s municipal tax ratio reaching 4.37 to one. This means that for every dollar of assessed value, commercial property owners in Calgary will contribute 4.37 times more in municipal taxes than residential homeowners. The province’s legislated cap is five to one. The ratio in 2023 was 4.26 to one.
The city council voted 9-5 in favour of the tax rate bylaw.
One of the councillors who voted in opposition to the bylaw, Sonya Sharpe, said that she knew the tax increase would be hard not only on residents but on businesses as well.
“I think the biggest disappointment for me isn’t even the numbers themselves. It’s council’s will to entertain any attempts at bringing that number down,” said Sharpe.
She added that she and Councillor Andre Chabot moved over ten recommendations during budget deliberations last November to reduce investments or spending, and none of them passed.
Councillor Terry Wong also brought a motion earlier this year, supported by Sharpe, to provide a property tax rebate to residential taxpayers. It was voted down.
Despite this, Sharpe said she is cautiously optimistic that progress can be made with mid-cycle adjustments.
“But for the Calgarians already struggling to make ends meet, who are already dreading their property taxes in May, on top of the provincial portion, and trying to figure out what essentials they have to give up, it is too little too late.”
Councillor Chabot explained that Calgary residents are victims of their own success, given that the municipality is such a desirable place to move. This has resulted in a shortage of housing supply amid an increased demand, resulting in property values increasing.
“Calgarians may be equity rich through the increase in assessment, but it doesn’t affect their income, and the amount they have to pay out is limited by virtue of the fact that they may be equity rich but cash poor,” said Chabot, who also voted in opposition.
As the city prepares to dispatch tax bills in May, Calgary residents and business owners are left to adjust to the heightened financial demands, underscoring the ongoing tension between municipal budgeting and provincial funding policies.
Property tax bills are expected to be mailed on the week of May 20, 2024.