How do Property Taxes Work?

When you own a home, you pay taxes on your property that go to the City. The taxes we pay have an important purpose, and understanding how property taxes work and how they are calculated, will hopefully put you at ease about your annual tax bill.

Property taxes are based upon City of Calgary property assessments which evaluate a property’s value, based on criteria such as: size, home style, condition of home, location, bathrooms, renovations, real estate stats in the area, housing starts in the area, etc. When it comes down to it, the neighbourhood you live in and the size of your home do not determine your taxes, it’s the final value of the assessment.

The most important thing to keep in mind, is that the City never never takes more than it needs. The City does not earn revenue through property taxes, that’s because of Revenue Neutral Policy. Essentially, just because your home is worth more on the market, does not mean your taxes automatically rise in the same regard.

While a raise in property taxes may not always be nice, there is a good reason for it and it’s actually a good sign of your home value and neighbourhood in many cases. Plus, Calgary’s property taxes are actually among the lowest in the country. A 2014 report by the Real Property Association of Canada showed that Calgarians pay an estimated 36% less in property taxes than the national average.

The Breakdown of  Your Taxes: 

• 62% of what you pay in property taxes goes to the City budget
• 38% of what you pay in property taxes goes to the Provincial Government
• The typical Calgary household pays $140 per month in property taxes
• Your property taxes pay for City services like parks, recycling/waste, police, etc.
• Your property taxes do not pay for infrastructure
• Property taxes pay for 42% of Calgary’s operating budget

Instead of an annual bill, you can also budget for your property taxes monthly through the City of Calgary Tax Instalment Payment Plan, find out more online here.