Happy January! It's the start of a new year, which can be exciting. And, if you own a home, it also means you've received your annual property tax assessment notice.

Let's be honest - none of us like paying property taxes. They’re one of the most significant costs of home ownership, and they never go away, even after you pay off your mortgage.

But property taxes are unavoidable if you own a home, so it’s important to understand how they work. We’ve taken the guesswork out for you by answering a few of the most frequently asked questions about how property taxes work in the City of Calgary!

1) How does the City use my property taxes? 

Property taxes are an important source of revenue for the City of Calgary. They’re used to pay for a variety of public services, including:

• police and fire departments
• water treatment
• waste collection
• recycling and composting
• transit
• parks and recreation
• social services
• educational services  

About half the revenue the City needs to operate is collected through user fees, grants, permits and licensing, and other sources; the other half is collected through property taxes.

2) How does the City calculate my property taxes?

The City calculates the property taxes you owe each year by multiplying a tax (mill) rate by the assessed value of your home. This tax rate is equal to the total property tax revenue the City requires divided by the total value of all assessed properties.

3) How does the City assess my property's value?

The City assesses most residential properties using the sales comparison approach, which estimates a property’s value by reviewing recent sales prices of similar homes in similar neighborhoods.

This is the same approach typically used by realtors to determine a home’s listing price.

The City also considers additional factors, so two homes may look alike on the outside but have different assessed values.

  Source: calgary.ca

4) I think my property assessment is wrong - can I appeal it?

Yes, you can! Property assessment isn’t an exact science and sometimes assessors get it wrong. You have the right to appeal your property’s assessment if you feel the numbers just don’t add up.

A Customer Review Period begins as soon as the city issues property assessment notices in early January. This year’s Customer Review Period runs from January 4 - March 13, 2023.

If you feel your property assessment is too high or seems unfair:

• review your assessment details
• gather evidence to support your appeal, like comparable sales figures in your area (it won’t be good enough to just say you think the assessment is unfair!)
• contact the City of Calgary’s Assessment department to present your argument

Keep in mind there’s always the risk the City could decide your assessed value should be higher, and you could end up paying more in property taxes.

5) When are my property taxes due?

In Calgary, property taxes must be paid in full as of June 30 each year. This date never changes, so mark it in your calendar!

6) What are my options for paying my property taxes?

The City of Calgary gives you several options to easily pay your property taxes, including:

• monthly payments, using the Tax Instalment Payment Plan (TIPP)
• in person or via mail
• through your bank – online or in-person
• as part of your mortgage payment

7) Are there penalties for paying my property taxes late?

The City takes property taxes seriously. If you don’t pay your property taxes in full, your account will be charged the following penalties on any unpaid, current-year balance:

• July 1: 7% penalty
• October 1: additional 7% penalty

8) What if I paid late because I didn't receive my property tax notice?

You’re responsible for ensuring your outstanding property taxes are paid in full, even if you didn't receive your property tax notice. The City is pretty clear on this matter, so pleading ignorance won’t get you very far.  

However, if you recently purchased a property and didn’t receive a tax notice, you may be eligible for reimbursement for late penalties under the province of Alberta’s Property Tax Late Penalty Reimbursement program.

9) What happens if I don’t pay my property taxes?

Property taxes aren’t optional. Failing to pay them can have serious consequences, including the possible loss of your property!

Any unpaid taxes and penalties that have carried forward from a previous year are considered arrears. Once your account is in arrears, you’ll be charged a penalty of 1% on the first day of every month, until the taxes are paid. 

When a property has a property tax arrears balance of more than one year, the City of Calgary:

• sends a warning notice
• charges a $60 penalty
• registers a Tax Recovery Notification (lien) on your property’s certificate of title

If property tax arrears of more than one year remain unpaid before March 31 of the next year, the City is allowed to seize the property and sell it at public auction, under the Municipal Government Act.

10) What if I can't pay my property taxes?

Property taxes are a significant financial burden and sometimes it isn’t easy to find the money to pay them.

Programs are available if you’re experiencing financial hardship and need help paying your property taxes. Visit the city of Calgary’s Property Tax Assistance Program or call 311 or 403-268-CITY (2489).

If you’re a senior, the province of Alberta offers assistance through the Seniors Property Tax Deferral Program.

11) Do Property Taxes Matter When I'm Buying a Home?

Property taxes matter when you’re buying a home! It's important to include them in your budget to ensure you can handle the total costs of ownership, beyond your mortgage payment.

Property taxes can affect your home-buying decision in several ways:

Price range: property taxes are one of the most significant costs of owning a home, so they need to be included in your budget

Mortgage approval: as a financial obligation, lenders consider property taxes when deciding how much of a mortgage you’ll be approved for

Type of home: townhouses and condos usually have lower property taxes than single-family homes, although they usually have HOA and condo fees, which can offset the savings on property tax

Neighborhood: assessed values are based on recent home sales in an area, so expensive neighborhoods will typically have higher property taxes

Check out the City’s property tax calculator - it's a useful tool to help you estimate a home’s property taxes!   

The Bottom Line

Property taxes can be a stressful part of buying a home, but you don't have to go it alone. Whether you're ready to buy or sell a home or just have a few questions, contact us. We want to help you make the right home-buying decision!