What are the top considerations when placing an offer on a home?
Some things that may have come to mind include the asking price, competing bids, and local comparables. Buyers often focus on ongoing costs like carrying costs, mortgage payments, and utilities. Yet property tax, a recurring expense that may significantly affect a homeowner’s budget, is routinely overlooked.
According to the most recent property tax rates, an Albertan homeowner in Wetaskiwin—which has the highest property tax rate in the province at 1.2847%—would pay $3,900.96 more in taxes on a home valued at $500,000 than someone in Canmore, which has the lowest property tax rate at 0.504508%.
Property taxes are an ongoing expense for all Canadian homeowners, so it’s critical to appropriately include them in your budget.
- Related Read: How Property Taxes Differ Across Canada
How Does Property Tax Work?
Calculate your property tax by multiplying your most recent Assessment Services Branch home value assessment by the residential rate established by your local municipality. Value depends on the property size, condition, renovations or structural alterations, and whether or not it has a basement or pool.
The residential tax rate of individual cities’ is determined based on their specific budgets, so they have considerable leeway when setting them. The quantity and value of the city’s real estate are two of the many variables that affect the tax rate. For example, local governments frequently have more freedom to maintain a low tax rate when they have a sizable tax base and a thriving housing market.
- Related Read: Why Are Property Taxes Higher in the Suburbs?
Another important consideration is the ratio of business to residential taxation in a city. In most Canadian municipalities, companies pay at least twice as much in taxes as residents. Generally, a higher commercial property tax rate results in a lower residential rate, and vice versa. Sometimes, a local council may choose to raise the latter if they believe their community needs to provide companies with more significant competitive advantages.
Which Alberta Municipalities Have the Highest Property Tax Rates in 2022?
We compiled the property tax rates of 25 municipalities and compared them to the average home prices for November 2022. The infographic below shows which real estate markets in Alberta have the lowest and highest property tax rates and what homeowners may expect to pay based on assessments of $500,000, $1,000,000 and $1,500,000.
A homeowner in Canmore with a property valued at $500,000 would pay $2,522.54 in property taxes based on the city’s rate of 0.504508, the second highest on the list. A similarly-priced home in Grande Prairie with the second lowest tax rate of 1.25747 would have a tax bill of $6,287.35.
The highest five:
- Lacombe: 1.11092
- Brooks: 1.133452
- Cold Lake: 1.13849
- Grande Prairie: 1.25747
- Wetaskiwin: 1.2847
The lowest five:
- Canmore: 0.504508
- Calgary: 0.71498
- Airdrie: 0.71927
- Chestermere: 0.719457
- Cochrane: 0.74947
For more information, speak with the municipality directly or connect with your provincial assessment authority to learn more about property taxes in the city you currently reside in or intend to move to.
This article was posted on December 14, 2022 citing the wrong average home price and tax assessed on a home at average price for the city of Lacombe. It was updated with the correct information on December 20, 2022.
