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Understanding multi-residential tax changes

Understanding multi-residential tax changes

Many multi-residential (MR) property owners are seeing tax increases higher than the typical residential increase and you may be wondering why – have they been unfairly targeted?

No, they were not. Calgary assessments are based on accurate market valuations as of July 1, each year. Each property’s portion of tax is determined by the value of their property in Calgary, which is conducted by Assessment.

Multi-residential properties are experiencing higher tax increases than the typical residential increase because:

  • MR properties increased in overall value by 12% while the assessment for residential class decreased by 4%.
  • Their market value assessment increased in 2020 based on their higher rental rates and lower vacancy rates.

Since multi-residential properties increased more than the typical market value change of other properties in the residential assessment class their tax share is proportionately higher.

Other factors contributing to tax increases this year:

Council approved a tax shift to help support business in Calgary. The municipal shift in tax responsibility from non-residential taxpayers to residential taxpayers was done to lessen the amounts paid by a smaller group of local businesses. Learn more about tax relief provided to businesses.

Learn more about the financial facts and how your portion is determined.

In 2017-2019 MR properties saw tax decreases

Multi-Residential property owners saw increases in 2020 but in previous years many who are located in the downtown and beltline saw decreases in their assessed value and (typically) decreases in their tax responsibility as well.

This chart shows a 4-year look at assessment value and tax change for high-rise property owners including rental values per unit.

BELTLINE - 98 units 2017 2018 2019 2020

Assessment

15,184,400

13,250,000

13,280,000

16,470,000

Assessment change year over year

-15.10%

-12.74%

0.23%

24.02%

Municipal taxes

$60,180

$51,694

$55,919

$77,635

Provincial taxes

$38,530

$32,541

$32,446

$45,174

Total taxes

$98,710

$84,235

$88,365

$122,809

Tax change year over year

-10.61%

-14.66%

4.90%

38.98%

Taxes per unit per month

$83.94

$71.63

$75.14

$104.43

Tax change per unit per month

$(9.96)

$(12.31)

$3.51

$29.29

Typical assessed monthly rent per unit

$1,100

$975

$1,000

$1,050

Assessed monthly rent change per unit per month

$(80.00)

$(125.00)

$25.00

$50.00

How many multi-residential property owners are there and who saw larger increases?

There are approximately 2,000 taxable multi-residential property accounts and they represent approximately 5% of the total residential base. Approximately 78% of MR properties are experiencing a tax change of greater than 10%.

Has The City worked with MR Properties owners?

The City conducted stakeholder engagement with a pre-roll symposium in fall 2019 and over 200 multi-residential property owners were invited to attend. Assessment was also at a Calgary Residential Rental Association (CRRA) luncheon last year and presented to 150 property owners.

We have also interacted with the multi-residential clients this year and continues to share information with Council for their awareness and related decisions.