How Are Property Taxes Calculated?

Property taxes are one of the most important revenue sources for local governments, and they are typically calculated based on the value of a property. In most cases, the tax rate is set by the municipality that collects the taxes, and it is usually a percentage of the property's value. For residential property taxes, the tax rate is typically lower than it is for commercial property taxes. The value of a property is typically determined by an assessment, which is conducted by a government assessor. The assessor looks at various factors, including the property's size, location, and amenities. They also consider recent sale prices of similar properties in the area. After conducting the assessment, the assessor provides a report to the municipality that sets the tax rate. The municipality then uses this information to calculate the amount of property taxes that are owed.

It's important to recognize that 2 taxes are collected as part of your residential property taxes in Alberta.

First is the property tax, which is used by the municipality to build and maintain services such as roads, parks, and infrastructure. The property tax is set using a mill rate, which is a pretty word for "calculated percentage of the value of your home".

The second portion of your property taxes is the education tax. This is set by the province, collected by the municipality, and forwarded to the province for distribution to the school boards. The municipality does not set the education tax rate. Be mindful that if your annual taxes go up, it might not actually be the property taxes that go up. Sometimes it's the education tax that went up.

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