By Medicine Hat News on June 13, 2018.
In order to prepare an estimated value of your property an assessor needs to know about the physical characteristics and condition of each property. Providing this information is important, as this data is used to prepare not only your assessment, but the assessment of other properties throughout the city using a mass appraisal process.
A property owner is required to provide their information in response to a request for information under the Municipal Government Act. This may be in addition to any previous information submitted to Assessment. Information sent previously or that was provided in connection with a tribunal hearing does not relieve the assessed person of the obligation to provide the information requested.
In addition, no person may make a complaint in the year following the assessment year if a person fails to provide any information requested within 60 days from the date of the request. This ultimately means that if you do no fill out your Assessment Request for Information form this year and you do not agree with the assessed value when it comes out next year, you restrict your ability to make a complaint and be heard through an appeal hearing.
This year most notices were mailed to property owners on May 1 with the request for information forms due on July 3.
Most non-residential properties in Medicine Hat are assessed using an income approach to value, which means that the value is based on the premise that the value of a property reflects the quality and quantity of the income (real estate income) that the property is expected to generate.
Through the income approach, an assessor will collect lease rates and expense information and will place properties into groupings based on factors such as type of property, its use, age, size, location, condition, and quality of construction. A “market rent” is then assigned to each property based on its grouping. The assessor applies standardized deductions for vacancy and collection losses and deductions for operational expenses to create a net operating income (NOI). The NOI is divided by a market derived capitalization rate to determine a final value. The information they use to determine these calculations is done through a number of surveys including sales verifications (based on Alberta Land Title changes), self-reporting and assessment request for information forms.
If you’ve recently purchased a property, the assessor may also ask for information about the sale to determine if it can be used as an indication of typical market conditions. This may include asking: What the use of the property was at the time of sale? Was it serviced? Was it purchased from a family member or an inheritance? Was there any personal property (e.g. appliances) included? Have there been any changes to the property since the sale?
An assessor will compare the property sales of similar buildings and characteristics to your property and apply an assessed value as of July 1 of the previous year in which a tax is imposed.
The Chamber of Commerce has been actively involved in tax related issues – locally, provincially and federally, as this is the one area that impacts all businesses at every level of government. One of the key issues we receive calls and concerns about at this time of year is around assessment, mill rates and assessment request for information forms. Our role is to not only advocate for issues that surface as a result, but also to educate our members and business community on the process to make sure they have the information they need on issues that impact them.
In addition, we have developed positions and advocated for issues such as the impact of increased non-residential property assessments, tax equity: Narrowing the gap between residential and non-residential property taxes and enhancing municipal financial planning and tax equity. If you’re interested in any of our policies and positions, visit our website at medicinehatchamber.com/pages/Advocacy#policy .
We have also formed an assessment ad-hoc working group, as a task force of our Business Advocacy Committee to evaluate the issues that have surfaced and determine if there are recommendations that the Chamber can make to prevent volatility in property owners’ assessed values and respective tax bill. If you are interested in finding out more about the ad-hoc committee, contact us at 403-527-5214 ext 221 or firstname.lastname@example.org.
For more information about assessment, visit the City of Medicine Hat website to find out more about the request for information (RFIs), view various forms and tutorials, view information about your assessment and assessment FAQs, as well as information on appealing your assessment, what the assessment timelines are, and to search the online property assessment map.
To find more about the provincial guidelines on assessment and taxation, visit the Government of Alberta Municipal Affairs website at municipalaffairs.alberta.ca/1538.
Lisa Kowalchuk is the executive director of the Medicine Hat & District Chamber of Commerce. For more information on this column or the Chamber, contact 403-527-5214.
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