Despite a drop in home values across much of the city, most Calgarians should still expect a hike in property taxes in 2020, the city assessor said Thursday.
The city assessed the typical residential home in Calgary at $455,000 — down four per cent from the previous year — according to data being mailed to Calgarians this week.
However, the drop in home values likely won’t translate to savings on most residential tax bills, said city assessor Nelson Karpa.
Council’s decision in November to shift some of the property tax burden from businesses to homesis expected to result in a 7.5 per cent hike for the typical homeowner in 2020.
“If a residential property went down by minus four (per cent), chances are you’ll still see about a 7.5 per cent property tax increase, mostly because of the decision by council,” said Karpa.
“Conversely, on the non-residential side, even if your property went up by that two per cent, chances (are) you’ll mostly likely see a decline in your non-residential property taxes from last year.”
The move is estimated to mean a 10 per cent cut to property taxes for the typical business next year.
Karpa says the decline in home values was relatively consistent across the city, though high-end homes have seen a greater decline compared to more moderately priced ones. The median single-family home was assessed at $455,000, down $20,000 compared with last year’s data.
The typical condo suite was assessed at $245,000, down $10,000 from last year.
Assessments are based on market valuations made as of July 1, 2019. The city comes up with a number that is typically based on sales of similar properties.
Calgary Real Estate Board chief economist Ann-Marie Lurie said the four per cent drop in assessed residential value is consistent with market conditions.
Lurie said Calgary’s continued high unemployment and the new mortgage stress test have helped drive prices down for single-detached homes in particular.
“The challenge is also where the job growth has been — it hasn’t been in the traditionally higher-paid sectors, so that has impacted the ability for prices to grow as well, especially on the detached side,” said Lurie. “So we’ve seen prices fall there just because there hasn’t been a lot of demand, there still has been supply and that weighs on pricing.”
However, certain segments of the residential market are doing better than others.
“Homes priced below $500,000, they’re doing better, so we’re seeing that the sales activity is actually improving in those markets,” said Lurie. “The challenge still really remains in the higher end of the market, where we’re still seeing supply gains and we’re not seeing as much demand growth, and sales activity continues to fall a bit in those areas.”
Commercial property values increase
After taking a hit in recent years, the city’s non-residential properties saw a modest increase in value, including in Calgary’s beleaguered office sector, which had seen huge losses in value as a result of the economic downturn and high vacancy rates.
The typical non-residential property saw a market value increase of two per cent, Karpa said, primarily driven by strength in the retail sector. Office properties across the city increased in value by roughly one per cent.
Karpa said it’s still too early to tell if the worst is behind the city when it comes to empty spaces in downtown office towers.
“I’m not so sure I’d be prepared to call it quite yet,” said Karpa. “We have seen renewed interest by investors in those office properties. Again, a little too early to tell what we’ll see coming forward for (2021). Early indications seems to be relatively positive, but we’ll wait and see.”
Overall, the total value of the city’s assessment roll, including business and residential properties, is about $301 billion — a decrease in value of about $5 billion from the previous year.
Calgarians have until March 10 to review their assessment notices and approach the city with any questions, either online at calgary.ca/assessment or by calling 403-268-2888.
There were a total of 3,171 complaints filed with the assessment review board based on last year’s assessments. Nearly two-thirds of those were for valuations on commercial properties.
Less than one per cent of property owners in the city filed a complaint about their assessments in 2019.
Calgarians can expect their 2020 tax bills to be mailed out in May.