One recurring expense homeowners have to budget for every year is property taxes. While this may not be top of mind during the homebuying process, it’s still important to factor this yearly expense into your long-term homeownership budget to avoid surprises down the road. In Alberta, property taxes are determined by the municipality’s yearly rates and a home’s assessed value, meaning they can vary significantly based on location.
Municipalities adjust their tax rates annually according to budgetary needs. The amount owed is calculated by multiplying the residential tax rate by a home’s assessed value, with the collected funds supporting essential local services like police, fire departments, schools, road maintenance, and more.
Generally, property taxes tend to be higher in less populated areas because there are fewer residents to share the overall cost of maintaining essential services. With this in mind, Zoocasa compiled the 2024 residential property tax rates for 25 cities in Alberta, using data sourced from each municipality’s website.
How is Property Tax Calculated?
While each province and municipality has its own tax formula nuances, an individual’s property tax is generally based on the following:
- The overall assessed value of your home, as determined by the Assessment Services Branch, which is prepared annually. This takes into account recent comparable home prices in your neighbourhood, as well as your home’s specific features. For example, whether a home has received renovation updates, has a pool or basement, or a larger lot size, will all be factored into its assessed value.
- The Education Tax Rate, implemented by the province of Alberta, the proceeds of which are used to fund regional schools.
- The Residential Tax Rate, which is determined annually by a municipality’s city council, based on how much funding must be raised to meet their budget requirements.
Southern Alberta Has the Lowest Property Taxes
Calgary Region is the largest urban area in the province, which means residents of its municipalities typically have lower tax rates as the cost of maintaining essential services is spread across a larger population.
Canmore has the lowest tax rate among all cities analyzed, with a residential rate of 0.461405%. This means that a home with an assessed value of $500,000 will have a tax bill of $2,307. Chestermere and Calgary follow with the second and third-lowest tax rates, respectively, with rates below 0.65%. For a home assessed at $500,000, a Chestermere homeowner pays approximately $2,690 in property taxes, while a Calgary homeowner pays $3,243.
Meanwhile, municipalities in and near Greater Edmonton have higher property tax rates than those in Calgary Region. For instance, in Edmonton, a home assessed at $500,000 incurs about $5,087 in property taxes, which is 57% more than a Calgary homeowner with a home assessed at the same value.
Similarly, homeowners in St. Albert will pay $5,627 in property taxes for a home assessed at $500,000, while in Airdrie, homeowners will pay 72% less for a home assessed at $500,000.
These examples highlight the importance of considering property taxes when choosing where to buy a home. While home prices often take center stage in the decision-making process, varying property tax rates can also impact the long-term affordability of homeownership.
Small Cities, High Property Taxes
With a population of 12,594 (according to the latest estimates from Stats Canada), Wetaskiwin is the smallest city in the province. It also has the highest property tax rate of the 25 cities we analyzed with a rate of 1.334170%. For a home assessed at $250,000, this results in a property tax bill of approximately $3,335, and for a home valued at $500,000, the tax bill doubles to $6,671.
Although Grande Prairie has a much larger population than Wetaskiwin, it has the second-highest property tax rate among the cities we analyzed. A Grande Prairie homeowner can expect to pay about $3,170 in property taxes for a home assessed at $250,000 and $6,340 for a home assessed at $500,000.
Completing the list of the five cities with the highest property tax rates in Alberta are St. Albert, Camrose, and Lacombe – the latter two having populations of fewer than 20,000 residents.
Property taxes are a significant financial consideration for all homeowners. Consulting with a real estate agent can help you determine the type of home and lifestyle factors you’re seeking for your next move. Give us a call today.
