Property Tax

By December 30, 2011 TERM
What is Property Tax? - Real Estate Definition

 

What is Property Tax?

Property tax is a charge on real estate that is collected each year by a municipality or county. The taxes may be applied to municipal, county, provincial or state programs.

Real Estate Agent Explains Property Tax

Property tax rates are different based on location, age of the building, the value of the property and improvements made to the property. For example, in Edmonton:

Neighbourhood Selling Price Style Of Home Year Built Taxes (2010)
Griesbach $300,000 Apartment Condo 2007 $2,583
Queen Alexandria $300,000 Bungalow 1948 $2,219
Belmont $300,000 Bungalow 1999 $2,362
Belmont $335,000 Bungalow 1994 $2,733

We have three houses and one condo worth $300,000, all in different areas, and all their taxes are different. The year the homes were built and the areas that they are located are factors that affect their property values. Specifically we have a comparison of two homes in Belmont, Edmonton. They are roughly the same age and they are of course in the same neighbourhood, but since they are worth different amounts, their taxes are different also. One house is worth $300,000 and one is worth $335,000. So you can see that any of these factors – price, location and age – could affect the taxes charged by the City of Edmonton on these properties. Other factors that affect property tax are whether the home has a developed basement, the lot size and the size of the home. Larger homes will pay more property tax than smaller homes and homes on larger plots of land will pay more tax as well. Developing a basement (provided permits are acquired) increases the value of the home and increases property taxed by extension.

It is important to note that different areas have different rates that the municipality uses to determine the taxes. Some areas may have property prices that are multiplied by a different rate than others. This rate is called the millage or mill rate, and it can change, even if the property values do not. If a city needs more money, it can just raise the rate, even if real estate values haven’t changed.

Mobile homeowners pay property tax, too – but only a portion of the total tax. They pay property tax on the ‘building portion’ of the real property, but not the land. The ‘land portion’ tax amount is paid by the mobile home park owner.

Taxes are assessed in Edmonton in January, tax notices are sent out in May and payments are to be made in June each year.

Why Does It Matter?

Property taxes are collected by the City of Edmonton (or any other city or county) to help provide services like road maintenance, snow removal, parks and recreational facilities, public transit, neighbourhood renewal programs, and police and fire protection.

A breakdown of property tax in Edmonton shows categories for the following spending: Provincial Education Levy, Provincial Education Requisition Allowance, Municipal Levy, Maintenance of Alley Lights, Police and Neighbourhood Renewal Programs.


 

by +Alan F Macdonald REALTOR® | Copyright © – gimme-shelter.com

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Alan F Macdonald

Author Alan F Macdonald

Alan F Macdonald is a real estate agent with Maxwell Challenge Realty in Edmonton, Alberta.

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