JOSE RODRIGUEZ

Welcome back to Calgary Conversations. And today we're going to talk about assessment. And we're fortunate enough to have our city assessor Eddie Lee, with us. Eddie welcome.

EDDIE LEE

Thanks for having me.

JOSE RODRIGUEZ

So, it's obviously a topic every year. It's a very, important topic for Calgarians. Can you just explain how this tax assessment work? How do you set a value on my home?

EDDIE LEE

Yeah. So what property assessment is all about is placing a value on a property for fair and equitable property tax distribution. And what we look at when we value a property is sort of the same things any homeowner would have looked at when they first bought their home. We would be looking at the property characteristics.

So, things would, come into play, such as location, the size of the home, whether it backs onto a park or backs onto Deerfoot Trail. All of those factors we consider into your assessment. The other thing we would look at is sales of recent properties. So, each year we look at the assessed value or the market value as of July 1st of the previous year.

So, for the assessments that we just mailed, that would be July 1st of 2024. And no different than when you first made an offer on the property that you purchased, you'd be looking at the sales that have recently occurred of similar properties. So, we take all of that sales information and the property characteristics information to pinpoint what that market value would have been on July 1st, 2024.

JOSE RODRIGUEZ

So, is that what would explain why one property in the same neighborhood as a similar property might have a different assessment? They could have a brick upgrade, or they've redone the kitchen in marble or whatever it is. Is that the reasons that the homes would be different?

EDDIE LEE

Yeah, absolutely. So, from the outside they might, look very similar, but there could be little differences. You know, a common one would be renovations or even the size of the home. The square footage could vary, even though they might look similar from the outside.

JOSE RODRIGUEZ

So, Eddie, one thing that I've always wondered is how do we come to what the final bill is for Calgarians? For this household, what goes into that final bill?

EDDIE LEE

There are actually three factors in with regards to property taxes. One is the amount of revenues that The City needs, the amount of revenues that the province needs and property assessments. So, let's talk about the revenues that The City needs. So that has been set back in November. So overall we're looking at a 3.6 per cent property tax increase. And that means 5.5 per cent for residential and 1.4 per cent for non-residential.

JOSE RODRIGUEZ

A mix of those two is what gives us 3.6?

EDDIE LEE

That's right. Yeah. And the reason why there's that difference, Council this year again, as part of a three-year, plan has shifted one per cent in non-residential property tax to residential property tax to better balance the distribution between homeowners and businesses. So even with that one per cent shift, business owners will see, their property taxes 4.6 times the amount on the same assessed value.

So, if your home went up the typical 15 per cent, you'd be paying that 5.5 per cent tax increase. So that's the second component is with regards to the provincial portion. So that portion is still unknown right now. So, we won't know that until the province passes its budget expected at the end of February or beginning of March.

And then we will then have our final budget required numbers. And that last piece is around assessment. And we have that those assessment values that we just mailed at the beginning of January and that value is based upon, you know, what your home would have sold for as of July 1st, 2024.

JOSE RODRIGUEZ

Can we talk a little bit about what that goes to fund? What gets funded out of people's property tax each year?

EDDIE LEE

Yeah. So, for residential property taxes, roughly a third of it goes to the province. So that helps to fund public education. The second biggest component is around public safety. So that's about roughly 19 per cent of residential property tax. And that goes towards, police, fire bylaw services as an example. The third biggest bucket where your property taxes help fund is around transportation. And that includes transit, roads, pathways, sidewalks, those sorts of things.

JOSE RODRIGUEZ

Do we keep track of, you know, which years receive more appeals than other years? And where are we tracking this year, or is it too early to tell?

EDDIE LEE

Right now, it's, too early to tell. Last year we had roughly around 2500 assessment complaints. And that is roughly 99.5 per cent of property owners did not file a complaint.

JOSE RODRIGUEZ

Just because my house was worth $600,000 and now is worth $900,000doesn't mean the city is collecting a whole bunch more money overall. Is that right?

EDDIE LEE

That's correct. So, any revenue changes how much money that The City needs to collect is transparently communicated through the budgetary process. So, this year, Council had an overall increase of 3.6 per cent, in property taxes. And that translated to 5.5 per cent for residential and 1.4 per cent for non-residential. And part of the reason why there's that difference is one of the things that we are trying to do is try to rebalance the property tax distribution between residential property owners and businesses.

Currently, businesses pay about 4.6 times the amount of tax on the exact same, for every dollar of assessed value.

JOSE RODRIGUEZ

And we did make a change this year and the previous year, right? To put less of a strain on non-residential.

EDDIE LEE

That's right.

JOSE RODRIGUEZ

And now can you tell us a little bit about that. Like is it 1 per cent each year?

EDDIE LEE

Yeah. So last year we transferred one per cent of the share from non-residential property owners to residential. And we did the same again this year.

JOSE RODRIGUEZ

And basically, what that means is if I'm running a business, I would not pay as much as I would have paid had we not made this change.

EDDIE LEE

Yeah. That's correct. So, if we didn't make that change the average business owner would see a 3.6 per cent tax increase. But because of that shift, they're seeing a 1.4 per cent increase on average.

JOSE RODRIGUEZ

There are different classes, am I right? There's industrial and then there's non-residential. Can you explain the classes and what those entail?

EDDIE LEE

So, in Calgary there are three classes. And each class there's a different tax rate. So, there's residential, non-residential and farmland. So, some people think that there may be different tax rates within say residential, that there might be a different tax rate for say single detached and condos. In Calgary there is only one tax rate. However, within residential there are lots of different types of properties.

You know, you've got your single detached, you've got your semi-detached, you got condos, you got big apartment complexes. One thing that we did note this year is that there was a difference in how those values changed. So, overall, for residential, we saw a 15 per cent value change for our single detached and semi-detached homes we saw 14 per cent change.

And for condos, we saw an overall 22 per cent change. And that is based upon the sales that we have seen in the marketplace. We have seen stronger demand for lower valued properties. Over the past year, we've seen really strong net migration into Calgary. You know, despite record housing starts, that hasn't been able to keep up with that demand in housing. And for those lower price pointed, properties, we saw a greater demand. And hence we've seen that those property values increase more.

JOSE RODRIGUEZ

How does the rest of this process unfold? What are the next key dates that Calgarians should know about?

EDDIE LEE

So, the next key date is around, late February, early March when the provincial budget comes out. So that will decide how much, tax dollars the province needs from Calgarians. So, after we receive that information, we’ll be passing the property tax bylaw in March, which will finalize what the tax rates will be. So, once we have those numbers, we will be mailing out our tax bills in May with a due date of June 30th. Property owners also have the option of signing up for our Tax Installment Payment Plan program.

JOSE RODRIGUEZ

TIPPS?

EDDIE LEE

TIPPS, that's right. So instead of making that one big lump sum payment due by June 30th, property owners have the option of breaking the down those monthly payments, or that big lump sum payment into 12 different smaller payments. One thing to note, it is a free service. There is no additional interest charges or admin fees or anything. It's a great way to help, Calgarians sort of break down that payment.

JOSE RODRIGUEZ

Do we know what percentage of Calgarians are using the TIPP program at this point?

EDDIE LEE

Yeah. So over 60 per cent of Calgarians use this program. It's our most popular form of paying taxes.

JOSE RODRIGUEZ

Yeah, I can't think of anybody I know who's not on that program.

EDDIE LEE

One thing I will also note is that this January we also mailed out TIPP recalculations and I sometimes get questions on how is that calculated? So basically, it's whatever your annual property tax bill was from last year. And then for residential properties, we would have added 5.5 per cent because that was the budgeted property tax change for residential properties. And for non-residential properties, that's 1.4 per cent change. Some Calgarians may look at the differences between what their December payment is versus their January payment. That isn't the annual change. You need to take a look at what the annual changes are to make that tax change calculation.

JOSE RODRIGUEZ

595,000 properties?

EDDIE LEE

Yes.

JOSE RODRIGUEZ

Wow. Yeah. So that is a lot of properties. We're a very big city and growing every day. What does that growth mean for assessment?

EDDIE LEE

We are seeing lots of new construction and then that's of course one of the results of greater migration. And as I mentioned before we are seeing record construction in terms of new housing. So, more supply that we can generate, we can anticipate more affordable housing.

JOSE RODRIGUEZ

Eddie, there are all sorts of ways in which Calgarians can get informed about their specific taxes and The City's property taxes. Can you tell us a little bit about those?

EDDIE LEE

Yeah, we have a wealth of tools that we have available on our website that explains the entire assessment process, including or legislated to value on the July 1st ‘24 date, how your property is assessed, what goes into it, the factors, those sorts of things. You know, I understand this is a difficult time for Calgarians. Affordability is top of mind. And our job is to observe and reflect those values. And if you have further questions our team is there to help.

JOSE RODRIGUEZ

As we mentioned Eddie, these are kind of tough times for Calgarians. And there are a whole bunch of different ways that we're trying to get as much information to people as we can. Can you maybe touch on some of those?

EDDIE LEE

Yeah. So, this year we've even changed our assessment notice. We put historical information on there. We've also have a graph illustrating how your home is comparing to the typical home changes. In addition to that, our website has a wealth of information that sort of outlines what goes into your property assessments, what dates matter. And that that is key in terms of a good property assessment system. Transparency. You know, what your home characteristics that we've valued your home at are based on and all of the sales information. So, we're doing everything we can in terms of being as open, as transparent as possible. And if there are any further concerns or questions that Calgarians have about their assessment, our team is here standing by at 403-268-2888 to help answer your questions.

JOSE RODRIGUEZ

And you've actually made yourself even more available through things like Ask the Assessor on Facebook Live and other things like that.

Nobody likes paying their bills. Well, nobody likes paying an increase in a bill. Is this a way to make sure that Calgarians are understanding what this bill funds?

EDDIE LEE

Absolutely. There's lots of confusion out there and we're doing our best to try to address any myths or set the record straight in terms of what the tax changes are, how assessments are part of that equation and that there's both the city portion and the provincial portion that all plays in, in a role in the property taxes. And in addition to that is, you know, what do you get from your property taxes? And it just goes back to, it basically touches every single part of your life, every single day from the time you wake up to the time you go to bed. All Calgarians rely on some of those key services that we provide every day.

JOSE RODRIGUEZ

We all like to compare ourselves to our neighbors. And if you do, some of the municipal benchmarking, Calgary comes off pretty well, doesn't it?

EDDIE LEE

Yeah. When you look at, residential property taxes across all of the major, municipalities in Canada, there is no other jurisdiction that's lower. So, we are trying to do more with less, with your taxes. You know, always balancing that level of service with affordability.

JOSE RODRIGUEZ

Eddie, I've got to say thank you for the math lesson because as I mentioned earlier, I’m mathematically challenged. Is there anything I forgot to ask you that you'd like to share?

EDDIE LEE

One thing you know, there's lots of questions in terms of how assessment impacts their taxes. And, you know, you don't have to guess or be a mathematician to figure this out because we've got a great tool. We've got our tax calculator at Calgary.ca/TaxCalculator. And all you need to do is punch in your assessment and you can see the breakdown between how much goes to the city, how much goes to the province, and what all the services that are provided from those property taxes are.

JOSE RODRIGUEZ

And I think you can also see the assessed values of homes in and around you so that you have an idea of where you fit into the map, am I right?

EDDIE LEE

Yeah. So, if you log in to assessment search, there's even more information out there. Like I said, you could look at the property details that we've assessed your home on. You can see sales. You can see the assessed values of, of other homes. It's a wealth of information.

JOSE RODRIGUEZ

Awesome. Well thanks again, Eddie.

EDDIE LEE

No, thank you. Really appreciate it.