Edmonton City Council finished its funding deliberations for 2015 yesterday and approved a tax increase of 5.7%. St. Albert, Sherwood Park, and other municipalities will be doing the same soon, or have already done so. This increase however, is misleading. Each year Edmonton homeowners assume that when the news tells them that they will be getting a decrease or increase on their taxes, that they will be getting that exact amount. They are shocked when the bill comes in the mail a few months later and they see an amount much different than what they thought their property tax was going to be. Knowing how property taxes work and why you won't be getting a 5.7% tax increase will help prepare you against the shock of getting the bill.
How Edmonton Property Taxes Work
Edmonton city taxes are done primarily through a property tax format. Essentially, everyone who literally owns a piece of Edmonton (through real estate purchase) Is required under law to pay taxes towards it. The more land you own, the more you pay. The more your property is worth, the more you pay. If for some reason your property is deemed to be valued less, you pay less. Edmonton civic workers will assess the value of your property annually on a simple land size and building size basis, and will inform you of what the City Assessed Value is every year. This amount is then factored in by the mill rate. The mill rate is calculated by taking the total of taxes to be generated and divided by the total estimated amount of property value in the city.
Why Edmonton Property Taxes are Going Up More (or Less) Than 5.7%
When Edmonton City Council states that taxes are going up by 5.7%, they are stating that the sum total of all taxes will be increased by 5.7%. But what it does not state is that your personal property taxes will be going up 5.7%. The unknown factor that will determine your actual tax amount is what your Assessed Home Value will be as determined at by the city. With the increase of property values reaching record levels in Edmonton, you may have your assessed value also increase substantially. When you take into account the increase in the mill rate as well as the increase in your assessed value, it is not unheard of for property taxes to increase up to double the average that the media recently announced. If you are in a situation where your home value was assessed lower, your amount will not reach the amount.
General Real Estate Statistics vs. Personal Real Estate Realities
The annual property tax averages are another example of how 'the average' is irrelevant to you as a home owner when it comes time to the impact on your home. Just like real estate market updates, it is always important to get your individual information on your property before knowing how to proceed. It is highly unlikely that you will see a 5.7% increase exactly on your Edmonton Property Tax bill in 2015!