Property tax as a revenue source
Of The City’s total revenue sources for the operating budget, all property taxes account for approximately
43 per cent in 2015. Of this, residential property taxes account for about 20 per cent of The City’s operational funding. Other revenue sources may vary depending on usage and external circumstances such as market fluctuations and third-party conditions.
Two ways Calgarians pay tax are: income tax that comes off your paycheque and residential property tax.
- The income tax that comes from a paycheque or tax return is collected by the federal and provincial governments to provide services such as healthcare, education, highway maintenance, Foreign Affairs, the military, and Canada’s national and provincial parks.
- The property tax you pay through property ownership or indirectly through rent each year is collected by The City with approximately 40 per cent going to the Province and 60 per cent to The City.
The City’s revenue structure poses several key challenges
- Most revenue sources are either frozen or stagnant and do not increase to keep up with the costs of inflation and growth.
- Property taxes are a higher percentage of The City’s total revenue due to other funding sources increasing at a lower rate. Property tax has gone from 38 per cent of total revenue in 2012, to 43 per cent of total revenue in 2015.
- Property taxes are the only source of revenue that can be directly affected to balance increases in expenditures. Rates and user fees can be changed, but the revenue associated with them is dependent on market demand.