Original Published on Sep 19, 2022 at 13:47
By Emily Plihal, Local Journalism Initiative Reporter
As a result of its recent municipal tax assessment, M.D. of Smoky River wanted to clarify some questions that have been posed to its staff since the mailout earlier this spring.
Staff say they receive many phone calls each year regarding the annual tax assessment, and they are hoping to eliminate some of the confusion and provide some insight as to how assessments are compiled.
“Assessment in Alberta is governed by the Municipal Government Act (MGA),” explains CAO Rita Therriault.
“Our assessor explains that assessments for residential property are legislated to reflect market value. Market value is defined as an estimate of the amount a property may be able to realize if sold on the open market between a willing seller and a willing buyer.”
During the assessment process, data is collected on each property within the municipality and arranged in similar categories. Assessment values are then used to determine the amount of taxes that will be charged to the owner of the property using a pre-determined tax rate or mill rate set by council upon budget approval. The documents that are sent to home and property owners each year are combined assessment and tax notices. Ratepayers have the right to appeal their assessment using a prescribed form to the Assessment Review Board by the date listed on their tax notice.
“The verified sales that have happened in similar category or value of property, will determine the value of the properties in the similar group,” says Therriault. “This creates a fair and equitable assessment between similar properties.”
The MGA outlines what property is assessable for taxation and it clearly defines property as a parcel of land, a structure or building improvement, or a parcel of land and the improvements to it. Assessments for all property types are prepared by professional, certified assessors. Assessors receive training in a variety of areas including property valuation techniques, legislation, and quality assurance.
“Assessors are designated officers of the municipality,” says Therriault. “The assessor is responsible for completing a number of things mandated by provincial legislation and regulations.”
In the Smoky River Region, Compass Assessment Consultant Inc. is the appointed service provider, but if you reside in a different location, you can call your municipal office to find out your appointed assessor.
To become a designated assessor for a municipality, an assessor has to hold a certification in one of the following designations: Accredited Municipal Assessor of Alberta, Certified Assessment Evaluator, or Accredited Appraiser Canadian Institute.
“Residents may notice assessors coming through the municipality occasionally,” says Therriault. “This to make sure that the property characteristics that could affect the assessment are noted and considered when determining the property’s value.”
Therriault says that the assessed property owner has the right to see the assessment roll, which will list the assessed values for all properties in the municipality.
Staff notes there are always many questions about education tax on the municipal taxes.
The Government of Alberta established the Alberta School Foundation Fund (ASFF) in 1994. The fund ensures that the education property tax collected by municipalities is accounted for separately from general revenues and is applied to all classes of assessment.
“Education property tax, collected by municipalities on behalf of the province, goes into a coffer to help support public and separate school students,” says Therriault.
“The tax helps to pay for infrastructure and various operational costs.”
According to a document by the Alberta government, a municipal taxpayer’s share is based on the assessment value of their property and the local education property tax rate, which you can find indicated on your municipal tax assessment. Each year the province tabulates how much each municipality must contribute to the public education system based on property assessment values. In turn, municipalities collect the education property tax from their ratepayers and provide it to the province through quarterly requisition payments, to put into the ASFF.
The reason the education property tax is pooled into one fund for the province, is it ensures all students in Alberta are given the same quality of education regardless of their municipality’s assessment wealth.
In addition to municipal and education tax collection, there is also a Senior’s Foundation Tax that the municipality collects on behalf of Heart River Housing, in our region. The mill rate for collection is also based on their annual budget and is applied to our assessment. The amount collected is then provided to Heart River Housing in quarterly requisition payments.
“There is a Seniors Property Tax Deferral Program in Alberta that allows eligible, low-income seniors to defer all of their property taxes through a low interest home equity loan with the Alberta government,” says Therriault. “This government pays the taxes on behalf of the eligible homeowner. The loan isn’t repaid until the property is sold or sooner if the owner chooses.”
Municipal taxes are a source of revenue for municipalities to administer and operate your municipality, to pay for things such as garbage collection, water and sewer services, road construction and maintenance, police and fire protection, seniors’ housing and education.