Property assessment is the process of assigning a dollar value to a property for taxation purposes. In Alberta, property is taxed based on the "ad valorem" principle. Ad valorem means "according to value." This means that the amount of tax paid is based on the value of the property. The municipality is responsible for ensuring that each property owner pays his or her fair share of taxes. Property assessment is the method used by municipalities to distribute the tax burden among property owners in a municipality.
Too often, the terms "assessment" and "taxation" are considered to be interchangeable. However, assessment and taxation are very different. Although one impacts the other, each is a distinct and independent process. "Assessment" is the process of placing a dollar value on a property for taxation purposes. This value is used to calculate the amount of taxes that will be charged to the owner of the property. "Taxation" is the process of applying a tax rate to a property's assessed value to determine the taxes payable by the owner of that property.
The assessment and taxation system begins with government policies that are outlined in the Municipal Government Act. All activities that are associated with property assessment and taxation are governed by this legislation. The assessor interprets these rules to determine which valuation method must be used for each property. An assessor collects a variety of information to calculate a property assessment.
Once the assessment is complete, the assessed value is entered on the assessment roll, which lists all of the property assessments in a municipality. Assessment notices are created from the information on the assessment roll. A notice is mailed to every property owner in a municipality. If property owners do not agree with the assessed value of their property as listed on their assessment notice, they can appeal their assessment. The assessment roll is used to calculate the amount of municipal and education property tax payable on each property.
The market-value-based standard is used to determine the assessed values for the majority of properties in Alberta. Market value is the price a property might reasonably be expected to sell for if sold by a knowledgeable, willing seller to a willing buyer after appropriate time and exposure in an open market.
Key characteristics of market value are that it is the most probable price, not the highest, lowest, or average price. It is expressed in terms of a dollar value. It assumes a transaction between unrelated parties in the open market. It assumes a willing buyer and a willing seller, with no advantage being taken by either party. It recognizes the present use and potential use of the property. Sometimes the market-value-based assessment of a property is confused with the sale price of an individual property. It is important to note that the market-value-based assessment is not the sale price. The sale price is an historical fact. The sale price is the amount the purchaser agrees to pay and the seller agrees to accept under the circumstances surrounding the sale.
Not all property is assessable for property tax purposes. The Municipal Government Act outlines what property is assessable for taxation. The Act defines property as:
Assessments for all types of property are prepared by professional, certified assessors. Assessors receive training in a variety of areas including property valuation techniques, legislation, and quality assurance. Under provincial legislation, a municipality must list at least one designated assessor. A designated assessor is responsible for completing a number of tasks laid out by provincial legislation and regulations. An assessor is hired by a municipality in one of two ways: as an employee of the municipality, or as a contractor. Contracting often occurs in smaller municipalities where the duties associated with calculating assessments are not a fulltime activity. Regardless of the assessor's employment situation, all assessors, whether they are contractors or municipal employees, must follow the same procedures and legislation.
Just as assessors abide by rules when collecting information for assessment purposes, taxpayers have a legislated right to know how their assessment is determined. A municipality is required to provide sufficient information showing how the assessment of a property was prepared. "Sufficient information" means that the municipality must provide enough information to explain to an assessed person how the assessment was prepared. In addition, the assessed person has the right to see the assessment roll, which lists the assessed values for all properties in the municipality. If requested to do so, a municipality must provide an assessed person with a summary of the assessment of any assessed property in the municipality, as long as the municipality is sure that confidentiality will not be breached.
A municipality may charge a fee for providing this information. The assessed person is also entitled to see the assessment record, a listing of property characteristics for his or her own property, and the assessment roll. The ability of an assessed person to see his or her assessment, check the facts, and compare his or her assessment with other property assessments makes the assessment system more accessible, fair, and understandable.
An assessment roll is a listing of all assessable properties in a municipality and their assessed values. The Municipal Government Act requires each municipality to annually produce an assessment roll. The roll must be completed by February 28 each year. The assessment roll must contain the following information for each assessed property:
Assessment notices are created from the information on the assessment roll. The assessment notice is the document that municipalities send to property owners to tell them about the assessment of their property. An assessment notice must include the following information:
Each year every municipality is required to send an assessment notice to every assessed person listed on the assessment roll. Each municipality must publish a notification in one issue of a local newspaper to announce that the assessment notices have been mailed to property owners within the municipality. Sometimes an error is found on an assessment notice. The assessed person can contact the assessor to correct this information. Corrections can only be made to current-year assessment notices. This means that a person cannot change an error, omission, or wrong description on an assessment notice from a previous year.
Each property in a municipality receives an assessment notice whether it is exempt from assessment and/or property taxation or not. If an assessed party believes that his or her property should receive an exemption from assessment, property taxation, or both, then the property's exemption status can be challenged through an assessment appeal.
To ensure that property owners have a voice in the property assessment system, the Municipal Government Act has set out a complaint and appeal process for property owners who have concerns about their assessment. The process involves two levels of formal appeal. The first is at the municipal level with an assessment review board (ARB), and the second is at the provincial level, with the Municipal Government Board (MGB).
The first step an assessed person should take if he or she believes his or her property assessment is unfair or inaccurate is to contact the assessor. The assessor can be reached by calling the municipality's office at the number listed on the assessment notice. The assessor may be able to inspect the property to determine if an error was made. The assessment can be corrected if necessary. If the assessor agrees that the original notice is not accurate, a new notice can be issued.
If the assessor and the property owner cannot come to an agreement, the property owner can begin the formal complaint process by filing a complaint with the local assessment review board. An assessment complaint must be filed using the Government of Alberta's "Assessment Review Board Complaint Form" (form number LGS1402), or provided by your municipality upon request. You can also download it from the Municipal Affairs's website at: www.municipalaffairs.alberta.ca
Once you have filed an assessment complaint with the assessment review board, the municipality is no longer required to fulfill a section 299 or 300 request for information until after the complaint has been heard and decided upon.
Additionally, Municipal Affairs has published and updated a number of guides in 2018:
- Guide for the Exchange of Assessment Information: Market Value Properties
- Guide to Property Assessment and Taxation in Aberta
- Filing a Property Assessment Complaint and Preparing for Your Hearing
The assessment review board is the first level of formal complaint for all types of property assessments except linear property. The assessment review board is a local board. Its members are appointed by the municipality. Each municipality has its own assessment review board. These boards are local because assessment and taxation are municipal responsibilities, not provincial responsibilities. The assessment review board is a quasi-judicial administrative board. This means it is created, empowered, and staffed according to the legislation laid out in the Municipal Government Act. The board is like a court as it can order something to be done. In this case, it can order a change to the assessment on a property.
Any assessed person, taxpayer, or person acting on behalf of an assessed person or taxpayer may file an assessment complaint. If ownership of a property changes while a complaint is in progress, the new owner of the property or business then becomes the assessed person or taxpayer in relation to that property or business. This person may become involved in any proceeding before the board.
Complainants must demonstrate that the assessment of their property is not a fair estimate of the price the property would sell for on the market. Preparing a case for the complaint hearing will take some time and research. Property owners who are considering filing a complaint should consult Alberta Municipal Affairs' guide, "Preparing for your Assessment Complaint or Appeal Hearing." As well, complainants should contact their assessment review board office for details about the process that must be followed and the information that has to be provided.
A complaint may be filed about any of the following items listed on the assessment or tax notice:
The assessment review board cannot hear complaints about the amount of the property tax bill or the municipality's tax rate. Assessment review boards cannot change the tax rates or the services provided by the municipality. If a property owner has specific concerns about these issues, he or she can discuss them with the municipality's administration or council.
Complaints must be filed in writing on or before the deadline shown on the assessment notice. The complaint must include:
If an assessment notice and tax notice are combined, the deadline for filing a complaint is on the tax notice. Municipalities must give the assessed person a minimum of 60 days to file a complaint. Once the complaint has been filed, the assessment review board clerk will schedule a date for the complaint hearing. At the hearing, the complainant will present his or her case to the board. The assessor for the municipality generally attends the hearing to present information on behalf of the municipality. After hearing all presentations, the assessment review board may announce its decision at the hearing if the members believe they can make an immediate decision. If the board does not make a decision at the hearing, the decision will be mailed to the complainant at a later date. All decisions of a municipality's assessment review board must be made within 150 days of the mailing of the municipality's assessment notices.
Sometimes those affected by an assessment review board decision (property owners, assessors, etc.) are not happy with the decision made by the assessment review board. If this is the case, an appeal of the decision may be filed with the Municipal Government Board. The Municipal Government Board is also a quasi-judicial administrative board. Members of this board are appointed by the province, not the municipality.
Appeals to the Municipal Government Board must be filed within 30 days of receiving the written notice of the assessment review board's decision. At the Municipal Government Board hearing, the complainant is required to make a presentation similar to the one that was made to the assessment review board. The Municipal Government Act provides that the decisions of the provincial board are final in matters relating to property assessments. Points of law may be appealed to the Court of Queen's Bench and pursued through the Alberta judicial system.
It is important to note that any decision an assessment review board or the Municipal Government Board makes is for the current year's assessment only. This means that the decision does not apply to previous assessments, nor will it be applicable to the next year's property assessment. For example, if the assessed value of a property is decreased as a result of a board's decision, it will not result in adjustments to previous years' assessments, nor will it have any bearing on assessments that are prepared in the future.