Written for the Lethbridge Herald by Mayor Bob Tarleck, July 2009

Every spring  with the mailing of property assessment and tax notices, questions arise about the assessment system used to determine the property taxes we all pay.

Two recent Letters to the Editor, for instance, suggested that the City’s property tax system lacks fairness and is in need of repair. Both writers failed to recognize that the assessment and tax system they criticize is, for the most part, a provincial rather than municipal creation. It is the Alberta Government that determines the legislative framework for assessment. There is one minor exception to this rule, but before discussing this I will attempt to throw some light on the often misunderstood Alberta assessment system.

The Alberta Government has mandated that beginning in 1998 property assessments:
• must reflect the market value of property as of July 1 of the previous year;
• must reflect the characteristics and physical condition of the property on December 31 of the year prior to the year in which a tax is imposed;
• must be kept current by being updated annually.

The primary responsibility of the City’s Assessor’s Office is to accurately and uniformly determine the market value of every property in the City of Lethbridge so that all taxpayers contribute their fair and equitable share for the services they enjoy.

Probably the most contentious part of the assessment system is determining fair “market value.” Market value is ”the most probable price which would be paid for a property in a competitive and open market.” It assumes the buyer and seller are acting prudently and knowledgeably, and allows for sufficient time for the sale and assumes that “the transaction in not affected by undue pressures.”

Using information from property sales, the assessor’s office uses internationally accepted mass appraisal techniques to estimate the market value of all properties. Prior to mailing, the assessments are statistically tested by the Provincial Assessment Audit Branch to ensure legislative standards are met.

What can you do if you don’t agree with the assessor’s estimate of your property value? I would recommend that as a first step you contact the Assessor’s Office to arrange a meeting with an appraiser who will be pleased to review the assessment with you. If an error was made, the appraiser will correct your assessment.

Under legislation, an Assessment Review Board is established annually to adjudicate all disagreements concerning market value assessments. The Clerk of the Board has accepted formal complaints filed on or before June 15, 2009. Complaints must indicate why an owner feels the assessment is incorrect. Information on the appeal process can be found on the reverse side of your Assessment and Tax Notice. But one reminder – if you have filed a complaint against your assessment, you must still pay your taxes by the due date to avoid penalties.

The Assessor’s Office does not set tax rates, nor does it determine how much must be collected in taxes. In its budget, City Council determines how much money is required to support city services. From this amount, Council then subtracts revenues from other sources, such as provincial and federal grants, license fees, and user fees. The balance represents the amount of money the City must raise through property taxation.

As well as collecting property taxes for municipal purposes, the City is required to collect property taxes for education and for seniors housing. These rates are set once the City receives the annual requisitions from Alberta Education and the Green Acres Foundation. City Council has no authority to alter or change these requisitions in any way.

One of the few assessment powers that Council has is to establish different tax rates for residential property.  The City of Lethbridge has adopted a varied tax rate, which means that multi-family housing units are taxed at a rate slightly higher than single-family homes.

In conclusion, the City recognizes that homeowners will scrutinize property assessments with a careful eye. And why shouldn’t they? The goal of the Assessor’s Office is to ensure that the process that determines your property assessment is as fair and transparent as possible.