A rental property on Princess Avenue in the North Flats has been assessed near the average selling home price in Medicine Hat - $263,000 - marking a year-over-year increase of $100,000, according to the city's 2023 tax roll.--News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
Tax assessment notices were mailed Tuesday but Don Ternes was one of about 50 property owners in the city to receive special notice that his assessment rose more than 30 per cent.
Specifically, the assessed value of a rental property he owns on a small sliver of homes on Princess Avenue in the North Flats rose by more than $100,000 to top $265,000.
“I understand that $164,000 might have been low, and I’m not angry there was a reassessment, but that is a whack all at one time,” he told the News on Thursday, standing outside the home he says he rents at a below average rate to a tenant he has had for 12 years.
“I’m trying to keep rent low,” said Ternes, who has two rental properties, and expects a 66 per cent tax increase would add $1,000 to his tax bill. “You see all these stories of big bad greedy landlords. But with everything we’re dealing with – inflation, utilities, interest rates – now the city comes in with this?”
The assessment department announced Feb. 21 that 42 residential accounts and seven businesses saw increases above 30 per cent from the previous year.
They will also receive a special letter in assessments mailed Feb. 28 as an attempt to alert owners to evaluate their values, said chief assessor Sue Sterkenburg.
She said getting assessment up to date is a matter of fairness for all tax accounts, and property owners are encouraged to call her department if they see problems.
“We maintain fairness and equity between similar properties,” she told the News on Thursday. “Where we see differences in values, we want to make sure we have the most current details on file so we’re making additions and deletions that affect the value.
“Request the details, review them and have an assessor come and look at the property if you don’t think it’s correct.”
She recommends any property owners with questions or complaints contact the department for an explanation or re-examination free of charge before filing an appeal.
A formal appeal costs $40 to $50 for residential accounts, and $520 to $650 for commercial, but two-party discussions are typically required before an appeal is heard.
“The Assessment Review Board is going to want parties to have those discussions before hand anyway,” said Sterkenburg.
In most years the majority of appeals do not end up before a review hearing. In 2022, 61 of 77 formal appeals were settled after assessment was adjusted by mutual agreement. Twelve others were withdrawn.
According to an overview of the 2023 assessment role presented to council last week, the media change in residential values was 6 per cent for single-family homes and 2 per cent for non-residential accounts.
Larger multi-family rental properties, which also include vacancy and income calculations, increased by 5 per cent as administrators said rents had risen faster than expenses.
Single-home rentals are not subject to the same formula.
Ternes, who owns two homes he rents out, said a 66 per cent increase in assessment is unreasonable. The result could put an additional $1,000 on the property’s tax bill compared to last year, regardless of this year’s tax increase.
He recently raised his rent by $100 per month to $1,200 for the house, and says it will be hard to ask for more.
“It puts you between a rock and a hard place,” he said.
Sterkenburg said the Flats area is home to a large number, but not all, of the large adjustments flagged by assessors. The area was designated for focus this year as one-fifth of the city’s 29,000 residential properties are re-examined each year for updates.
As well, sale prices of comparable properties over the previous three years are factored into market value. That comprises half the formula to determine assessed value, and sets the date at the previous July 1, when the local real estate market was still holding gains over the previous two years.
The “four per cent” tax increase noted in the recent budget refers to the overall increase in revenue required from the entire tax assessment base. Since property values rose, the mill rate charged against the assessment will likely be lowered this year.
That formula is used to only collect a specific amount of money noted in the budget at tax revenue (about $84.8 million in 2023).
However, property owners who see larger than average increases in assessment will see more than four per cent rise in their eventual tax bill.
