Chestermere Lakefront owners have experienced an unusually high increase of property value.
On May 21, City Council finalized the tax rate bylaw, which resulted in a two per cent tax rate reduction.
“The reduction was achieved primarily through improved efficiencies, personnel adjustments, and realigned projects,” said Mayor Marshall Chalmers.
“I’m seeing all of the hoopla of our taxation going down, the lakeside owners have taken a horrific hit,” said Chestermere residents of 27 years Heather Davies.
“I’m thinking holy smokes, where are these people and who are they who got this two per cent decrease,” she added. “If it is, that’s great because we can always use a reduction in costs no matter what.”
The property assessments are completed by a third party which had indicated that areas around the community, including lakefront homes, have experienced a higher than average increase in property value, said the Chief Financial Officer, Brenda Hewko.
The amount of tax residents pay is based on the assessed value of their property and ensures that every homeowner will contribute an appropriate amount to municipal services, Hewko added.
The assessments are based on many factors such as on-site visits, real estate Multiple Listing Services (MLS), Alberta Land Titles, and financial institution information.
“If a property experienced a significant increase in assessment, the change in the assessed value of their home might outweigh the tax decrease, and this would end up causing them to pay more tax than last year,” Hewko said.
“If the assessment of their property stayed the same, that homeowner would see a two per cent reduction in the amount of tax they had to pay. Specific to the group of lakefront homes, the assessed value increased between four per cent to 11 per cent this year,” she said.
She added that all homeowners were sent a property assessment and were given 60 days to appeal the assessment given.
“I’m in an old property, an old cottage, no upgrades, no nothing, this is a teardown, and I heard other properties have gone up. This is a pretty heavy hit,” Davies said.
Davies had property assessors to her home two years ago which resulted in a tax reduction after they came to her property.
“I know the assessments are based on what people are purchasing properties for, but we really took a hit,” Davies said.
“In Alberta a homeowner pays property taxes proportionate to the value of their property,” Hewko said.
If a property is worth $800,000 regardless of the location, the home owner will pay more taxes than a property worth $400,000.
“To determine market value, assessors look at the size, type, and age of your property, as well as its location, style, condition, upgrades, and lot size,” Hewko said.
Since July of 2015, 76 lakefront properties were sold, which indicated that public interest has increased, while the supply has stayed the same.
“That could be one of the causes to the increase in assessed value. Also, this much activity means the quality of assessed value for each lakefront property is likely very accurate to market conditions,” Hewko said.
There was one tax rate for the entire community. However different neighbourhoods of Chestermere were grouped together during the assessments, said City of Chestermere Communications Team Lead Megan Matthies.
The rates fluctuate based completely on external factors, such as how many houses sell, and how much the properties are worth,” Matthies said.
“The city is in charge of the rate, and we only have one rate for houses in the community,” she added. “That’s the rate that went down two per cent for everybody.”
The change stems from groups of properties, such as the lakefront properties that are selling higher, and have a higher value.
“They might see an increase because their houses are worth more. Therefore, they would pay more taxes,” Matthies said.
“They still would have had that two per cent decrease of the tax rate applied to them,” she added.
“Taxes are not arbitrary; the rate is the same for everyone. The difference is only the value of the home. Specific communities or areas are not paying a different tax rate than anyone else,” Hewko said.
Not all neighbourhoods within a city will fluctuate the same year after year, said Accurate Assessment Group Ltd. Assessment Specialist Bod Daudelin.
“Some areas of the city may experience moderate market inflation or deflation while other areas may experience minimal or no change,” Daudelin said.
He added these factors are to be considered by property owners when they contemplate how a tax rate announcement may impact the properties they own.
The lakefront property assessments for the 2019 tax year included 403 lakefront properties, 76 properties sold between July 2015 to June 2018, 25 assessment inquires between March 2019 to May 2019, one property assessment revised, and zero official assessment complaints.
Along with experiencing a tax increase, this is the first year Davies has had to pay to launch her boat in addition to a recreational fee that is included in the taxes.
“I was really surprised this year when we went to launch our boat, and we had to pay $35,” Davies said.
She added, “We’re very complacent, and that’s a problem, we’re just not speaking out. We need to be more vocal, that’s for sure.”
For additional information, please contact the City of Chestermere at www.chestermere.ca/assessment, or 403-207-7050.
