Many people in Calgary feel that we pay too much in property taxes yet have limited understanding on how property tax is calculated by the city or what they can do to reduce their property tax.
1. What is property tax and how property tax is calculated?
Property tax is the real estate tax calculated by the local municipalities and paid by homeowners. The property taxes are ad valorem, i.e., they are assessed based on the value of the property. They are are calculated using two figures—the tax rate and the market value of your property.
2. What is property tax revenue used for?
Revenue generated from property tax is used for funding services such as law enforcement, fire departments, education, and others. Essentially, these funds are used towards the benefit of all the residents, but at an individual level, these taxes can be quite burdensome.
As experienced rental property management professionals we can tell you that sometimes the assessed value of the property is too high and this can unnecessarily inflate your property tax bill.
3. Things to know about property assessment!
If you think that your property tax is higher than it should be, it is a good idea to appeal with your city. The appeal process can take some time, but it isn’t overly complicated. Before making an appeal, you should make sure you know what date is your property assessment based on and whether the assessment value is fair compared to similar properties in the area. Start by taking to your mortgage brokers and real estate agent and seek their opinion.
Most rental property management companies have a fair idea of what is a fair valuation of your company and whether an appeal can is worthwhile. You can also speak to your family and friends and if they agree that the assessment is high, you can make an appeal. Here are some pointers from our real estate investment experts that you must consider:
4. Is your property assessment fair?
As noted earlier above, property taxes are the product of your property’s assessed value and the local tax rate. You cannot do anything about the tax rate, but you can certainly argue that your property has been over-assessed. Check your Calgary property assessment report.
Please remember that this figure is an estimate of your property’s selling price and is based on property sales information from a specific assessment date. This means, if a similar property in your area sold for a lesser amount than your home’s assessed value around the assessment date, you may have grounds for appeal.
5. Check for errors in your Calgary property assessment?
Municipalities or provincial agencies are responsible for carrying out the assessments in order to calculate the property tax. While not common, there is still room for errors. You must carefully check your assessment report and see if there are any factual errors or clear-cut mistakes. For example, if the report mentions that you have a bigger garage or front yard than there actually is, you can appeal the assessment.
6. Find comparable properties in the neighborhood
The best way to strengthen your appeal and reduce your property tax bill is to find a comparable property in your area that was sold for less than your property’s assessed value during the assessment period. If you are able to demonstrate a significant difference (5% or more) between your home’s assessed value and the selling price on a couple of comparable properties, you have a strong case. For comparison, make sure you choose properties that are similar in size and the same quality as your home.
7. Prepare your case
If your house is unique and stands out in the neighborhood, there are better chances that you will win appeal. The unique, feature-rich houses in upscale neighborhoods are more likely to get over-assessed. Otherwise, assessments are quite accurate. For example, if you have real estate in Calgary that's pricey and sought after neighborhood, but it is much smaller than other properties in the neighborhood, you might have a good chance at the appeal.
When you decide to appeal an assessment to reduce your property tax, you may wonder what your chances are. If you are confident enough and have substantial evidence to prove that you have been over-assessed, your odds are pretty good. It has been seen that in Ontario, nearly 50 percent of those who filed an appeal against over-assessment succeeded in getting their valuations reduced.
Property tax relief due to Covid 19
According to our real estate investment experts, many municipalities have extended the property tax payment deadlines and waived off penalties and interest on delayed tax payments. You may check your local municipality’s website to find out about the Covid 19 relief measures being offered.
If you need any help with buying, renting or managing your property, please do not hesitate to get in touch with your preferred Calgary Realtors or property management company in Calgary.
LEASEWELL property services is one of the best property management companies in Calgary. We help landlords with property management of their rental property in Calgary more profitably and hassle free way. Let us help you market your rental property to match with great tenants and keep your rental in top shape to maximize return on your rental property investment. For more please visit our website www.leasewell.ca or contact us at email@example.com
Property Manager | Calgary