Where do your property tax dollars go?
According to the annual City of Calgary citizen satisfaction survey conducted by Ipsos Reid, 92% of Ward 6 Residents are interested in knowing exactly where their property taxes are going. Contrary to popular belief, one dollar of tax does not correlate to one dollar of service.
In 2015, the municipal portion of the typical annual residential tax bill was $1,682 (based on a median single family residential property assessed at $475,000). This means, in 2015, the typical Calgary household paid $140 per month in municipal property taxes to support the delivery of major services that Calgarians count on every day.
On the road – construction and maintenance of pedestrian pathways and roads; streetlights and traffic control; street cleaning and snow clearing; and public transit.
In your community – police, fire and emergency services; youth programs; planning for the future of new and existing communities; recreation and arts programs, events and festivals; wellness initiatives; and bylaw services.
In your city – maintenance of public spaces; disaster response services; protection of historical resources.
In the environment – the collection of garbage from our homes; climate change action; and the care and management of parks and green spaces.
Other essential services provide citizens access to information through 311; operate and maintain City facilities; and ensure planning and resources are in place to build a great city.
Some services are not paid for by property taxes but by user fees. For example: In your home, services such as clean, quality drinking water, and recycling are all services with user fees attached. In other cases, it’s a combination, such as public transit which is funded by both taxes and user fees, approximately 50-50.
Property tax as a revenue source
Approximately 60 per cent of your property tax goes to The City. Of The City's total revenue sources for the operating budget, business and residential property taxes account for approximately 42 per cent. Residential property taxes account for about 20 per cent of The City's operational funding. Calgary has one of the lowest residential property taxes across 13 major Canadian municipalities and is low to average in comparison when utilities are included.
How are property tax rates established?
Each year, Council approves services and projects to be achieved the following year, and the corresponding budget. This work is prioritized and analyzed cross-corporately, using citizen information, legislative requirements, long range plan goals, market conditions, along with estimated costs, including salaries and wages. This is approved by Council to ensure The City has the resources required to support the delivery of City services.
Revenue sources other than property tax, such as business tax, licence fees, user fees and provincial grants are subtracted from the prioritized service expenditures, and the balance is supported by your property tax. Tax rates are established each year to calculate the property tax and reflect the amount of taxes to be paid for every dollar of assessed value.
Why do my property taxes increase even with more people moving to Calgary?
New Calgarians do pay property taxes, either through property tax or rent, but the challenge for Calgary is that before new citizens come here, The City has had to predominately finance infrastructure to support new developments. Developer off- site levies, which recently Council unanimously increased by 40 per cent, and new property taxes pay for water and waste-water treatment, electricity and natural gas utility lines, roads, street lighting, etc. All Calgarians rely on City services and, understandably, more citizens mean an increased demand on services including transit, parks, roads and recreation. Therefore, as Calgary continues to grow, (current data trends indicate that we will grow by 25,000 people this year) The City must invest in new infrastructure as well as expand current services to ensure that Calgarians are getting the services they want and need. What this means is that The City is not able to address these increasing needs even with additional user fees (e.g. transit fares, licensing fees), grants from other orders of government, and the additional property tax revenue from new Calgarians. So, our property taxes increase even as new people come to Calgary because that is the source of revenue available to the City to close the gap between needed services and operational expenses.