Council is considering the feasibility and equity of creating a residential assessment sub-class for McNutt Estates subdivision, that could change the tax rate used to calculate McNutt Estates property taxes in the future. Property-owners in McNutt Estates will receive an information package in the mail in June or July, and are invited to provide input to council.
Property taxation
Property tax in Alberta is an ad valorum tax. It is based on the value of a property, as assigned by a certified property assessor. Property Assessment is regulated by the Government of Alberta. You can find a comprehensive Guide to Property Assessment and Taxation in Alberta online at www.alberta.ca/property-tax.
Assessment classes
Every property is assigned an assessment class. This is an important part of the assessment and taxation process. The assigned class determines the tax rate that will be applied to each property, as assessment classes may have different tax rates. Property is classified according to its actual use. The Municipal Government Act (MGA) establishes the following classes:
Class 1 – residential
Class 2 – non-residential
Class 3 – farmland
Class 4 – machinery and equipment
For assessment and taxation purposes, McNutt Estates properties are considered Class 1 – residential. Currently the Town of Rocky Mountain House has one assessment class for all developed Class 1 properties in Town. That means the annual property tax amount for every residence is calculated using the same tax rate (mill rate).
Assessment sub-classes
The MGA allows for the establishment of sub-classes to assign different tax rates to different types of properties. These may differ between communities, and are wholly at the discretion of Council.
In Rocky Mountain House, Council has established a sub-class under class 1 for vacant residential lots. This sub-class has a higher tax rate than the primary residential class. Council has also established a sub-class for small businesses in Class 2.
While the MGA gives Council the authority to create sub-classes, there are certain parameters it must consider:
- Residential sub-classes can only be based on the physical characteristics of a property, such as property type (e.g., single detached houses, apartments, row houses and apartment buildings) or size (either square footage of a house or lot size).
- Sub-classes cannot be based on characteristics of the people who own or live in the home, such as income or family size.
- Sub-classes cannot be based on services that are provided to the property.
Equality in municipal services
Property tax is not a fee-for-service, but a way of distributing the cost for services and programs that Council determines necessary or desirable for the community as a whole, as per the Municipal Government Act. All residents of Rocky Mountain House, regardless of their property’s assessed value, receive an equal level of service for parks, recreation, library, policing, fire, cultural and social services, economic development and governance.
Municipal water and sewer utilities
The municipal water and sewer systems are fully funded through utility billing, not property taxes. Water and sewer services do have an effect on land value (serviced land has a higher value than unserviced land) but a property’s connection to the municipal water and sewer system does not inform its property taxes.
Next steps
While this current public engagement initiative is focussed on McNutt Estates, other areas of Town may also be considered.
Council will host a Town Hall meeting on Wednesday, September 4 at 7 P.M. to hear directly from property owners. You are invited to attend.
In order to ensure productive discussions at the Town Hall meeting, McNutt Estates residents are invited to complete the below questionnaire before July 26. (Alternatively, download a fillable PDF version here, and email your completed questionnaire to town@trmh.ca).
