Council members discuss the 2023 assessment role on Tuesday night at city hall.--News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
Tax increases this year may come in just under the 4 per cent approved late last year, while the ups and downs of the real-estate market may require actual rates to fall – though more money would be collected.
The seemingly contradictory situation was explained as the 2023 tax assessment roll was presented to council on Tuesday.
It shows broad gains in property market values in 2022, values taken at July 1, meaning the total assessment rose, but since the city only aims to collect a set amount, the tax rate will likely be lowered when council sets the rate in May.
“What we’re seeing overall is stability, with some shift between the classes,” said Sue Sterkenburg, the city’s chief assessor, stating the overall value of property in the city rose by a total of $584 million to sit just under $10 billion in total.
That however, comes largely due to higher closing prices on real-estate sales in early 2022. That market value, determined at July 1 in the previous year, forms part of the assessment value.
“People may see some lower prices (currently), which is the result of interest rates, but our valuation date is the previous July,” said Sterkenburg.
Overall, assessment value is “revenue neutral” for the city, though individual bills may vary.
The 2023-24 city budget calls for the city to collect 5 per cent more property tax revenue this year – about $85 million in total – to cover increasing costs of city operations.
However, that assumed 1 per cent would come from new construction or physical improvements that add to the assessment base.
That would leave the increase of 4 per cent to be covered by the existing tax assessment base.
New growth came in at 1.15 per cent, according to an overview of the roll, presented Tuesday night to city council’s regular meeting.
“We have seen growth, and that’s good news,” Sterkenburg said.
That “growth” includes $41.3 million in non-residential class, though Sterkenburg said it was largely due to the addition of the city’s Unit 17 expansion at the north-end power facility.
The single-family residential property total grew by $40.6 million from new home construction, while the value of nearly 26,000 accounts rose $460.5 million due to price changes.
Multi-family residential class values rose by $24.3 million, though income calculations that are blended into non-residential assessments show rents are rising faster than expenses.
Assessment notices will be mailed out Feb. 28, and council will set the tax rate in mid-May. Taxes are due, as usual, on June 30.
“We’ll bring forward three scenarios for city council to consider when it comes to the effect on different property types,” said Sterkenburg.
A breakdown of valuation changes show property values broadly rose between 5 and 10 per cent across the city.
The largest change, 11.1 per cent, was recorded in a strip of commercial and residential properties in Ross Glen, east of Dunmore Road, followed by areas of the River Flats (10.1 per cent).
Those areas were part of a physical re-evaluation process undertaken each year by the assessment department.
Coun. Robert Dumanowski called the overall median increases of 2 and 5 per cent for commercial and residential properties “pretty reasonable.”
“People look at what’s happening in the last few months (with home prices), but not what happened last summer,” he said.
City assessors found that median residential property value increases ranged from 2 per cent for tri-plex and quadplexes, to 8 per cent for manufactured homes.
The largest subclass, single-family residential, rose 6 per cent, and residential condominiums by 4 per cent.
The median change among all non-residential properties was 2 per cent.
Hotel properties remained constant after several years in flux.
Overall city spending rises from $132 million in 2022 to $148.5 million in 2023, according to the plan, an increase of 13.1 per cent.
To balance the budget, an additional $4 million would be collected from property taxes, a four per cent increase to user fees and charges, more investment returns, as well as boosting a utility Municipal Consent and Access fee to bring in $2 million more in 2023.
