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Ward 6 News: Understanding assessment and property taxes - Revenue neutral tax policy

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Ward 6 Report

Understanding how your property assessment affects your tax bill can be difficult, given The City’s use of a revenue neutral tax policy. This policy is the reason why the tax rate you see on your bill may not match the tax rate we set in November 2012. To help you understand how this policy affects your tax bill, we will do our best to explain how revenue neutral works.

“Revenue neutral” essentially means that market fluctuations do not lead to increased or decreased revenue for The City. This is important because it provides predictability when we design business plans and set the budget for the following year. The revenue neutral policy also ensures accountability and transparency, as citizens can reasonably expect that the budget we approved in November will not change significantly throughout the year. Minor adjustments to how resources are allocated may occur at times, but the overall budget approved by Council can be expected to remain substantially the same.

This revenue neutral policy ensures that:

  • Tax revenues do not change automatically with assessment changes due to market fluctuations
  • Any tax change brought forward by The City is communicated through the budgetary process
  • With each year’s assessment roll, a revenue neutral tax rate is established, based on the application of these principles.

In applying this policy, a property’s year-to-year per cent change in assessment is compared to the approximate city-wide per cent change. If a property’s change is:

  • Less than the typical per cent change – that property’s revenue neutral taxes will decrease
  • More than the typical per cent change – that property’s revenue neutral taxes will increase
  • The same as the typical per cent change – that property’s revenue neutral taxes will stay approximately the same

The typical residential property assessment change was three per cent between 2012 and 2013. This means that any property that has an assessed value change above three per cent will see an increase in their revenue neutral taxes over the previous year. Once we approve the tax rate increase in the spring, your actual property taxes owing will increase from the revenue neutral amount shown on your Assessment Notice by the same percentage as the increase in tax rates between 2012 and 2013 (subject also to changes in the provincial property tax). Council’s proposed tax rate increase for 2013 is 5.5%. 

Property owners can use the online 2013 Property Tax Calculator to receive an estimate of their 2013 property tax given their 2013 assessment value and the proposed 5.5% tax rate increase.

Please do not hesitate to phone the Ward 6 office if you require more information or clarification on how the tax and assessment process works. 

Back to February 2013 report

This content represents the personal views and opinions of the Ward Councillor and should not be taken as a statement of policy of The City of Calgary. The inclusion of any external content does not imply endorsement by The City of Calgary.

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