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The Tax Man Cometh: Edmonton's Property Tax Structure and How It Affects You

Posted by Sara MacLennan on Tuesday, January 6th, 2015 at 3:52pm.

To paraphrase Daniel Defoe and, to a lesser extent, Benjamin Franklin: there are no certainties in this universe other than death and taxes. Similar to income tax, the amount of property tax a household pays depends on different variables. Geographic location and the value of real estate are some of the issues that must be considered when deciphering how Edmonton's property tax structure affects your finances.

Composition of Property Taxes in Edmonton

The biggest portion of your annual Edmonton property taxes is calculated according to the budget set up by City Council every year. This portion typically makes up 68 percent of your property taxes. Another significant portion of your property tax is determined according to the Alberta government. Edmonton is obligated to collect a provincial education tax, which accounts for approximately 32 percent of total property taxes, and takes care of the costs of public education. Depending on where your home is located, property taxes may also include local improvement charges that reflect specific services rendered in a particular neighbourhood. According to the City of Edmonton, about 25 percent of all residential properties are located in an area that pay for local improvement charges on their property tax.

Relating Fluctuating Property Value to Property Tax Changes

The City of Edmonton performs an assessment of individual residences when determining the changes in property taxes. Specifically, the rate of change in the value of a property is taken into account when calculating the change of taxes. A residence that grows in value at an average rate receives an average rise in municipal tax. Properties whose value increased at a rate greater than average have a larger than average property tax increase while lower house values result in a smaller increase (or even a decrease) of property tax. This mechanism directly relates home value with taxes, resulting in a more appropriate share of the tax burden.

Local Improvement Charges for Property Taxes

Local improvements are considered to be construction projects that take place close to a residential property. These projects are labelled as such due to the fact that they improve a specific area of the city rather than Edmonton as a whole. As such, the costs for this work must be taken care of by either the owner of the property or through the local improvement tax. Activities provided by transportation services such as lighting, streetscaping, curb crossings, alley resurfacing and reconstruction are considered local improvement projects. Local projects can also be spearheaded by the City of Edmonton or property owners who communicate an official expression of interest. Changes requiring the payment of additional property taxes may be protested in order to avoid bills for unwanted work.

Despite the fact that most people consider taxes a public nuisance, levies such as property taxes help pay for vital infrastructure and services. The structure of Edmonton's property tax is designed to respond to civic needs and local improvements while distributing the tax burden as fairly as possible. Paying attention to changes in real estate value and services provided in your neighbourhood ensure that you're not paying more than your fair share.

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