Over the past two weeks, Drumheller residents have received their annual tax assessments in the mail.
Bill Wulff, Acting Director of Corporate Services for the Town of Drumheller, took some time explain to inSide Drumheller how municipal taxes are calculated and how residents can appeal.
“We get this often. Someone will come in saying their taxes are too high. We say they can’t appeal their taxes, just their assessment. Then, they say their assessment is fine and they don’t want the value of their house to go down,” said Wulff.
The only avenue of appeal, for residents who disagree with their taxes, is the market value assessment of their property.
To determine property taxes, the market value assessment of the property is multiplied by the tax rate, education tax rate, and Senior Foundation requisition rate.
Tax rates were set earlier this year at 0.0072268 for residential and 0.0115074 for nonresidential. The education tax rate is 0.0027096 for residential and 0.0038132 for nonresidential. The Seniors Foundation requisition is 0.0003953.
For example, a property assessment of $170,000 would result in property taxes of $1,228.56. However, with the addition of the Education Tax and Seniors Foundation requisition, the total property taxes become $1,756.39.
For every $1,000 removed from the market value during an appeal, property taxes are reduced by $10.33 for residential and $15.72 for nonresidential.
During the appeal process, an assessor is brought in to do a thorough inspection of the property to determine it’s market value. Any major construction on the property will affect the market value and, by extension, property taxes.
“If you have an appeal, the assessor will be visiting your property,” said Wulff. “The assessment is based on the market value of your property, so if you can sell that new garage for $15,000, your assessment will go up that much.”
Normally, the market value for a property is determined using a mass appraisal process. Assessors examine property sales in a neighbourhood, then apply the average per cent increase or decrease to the remaining properties.
“The assessment is really mass appraisal. Instead of having someone come into your house and look at absolutely everything, what happens is, they look at the sales in that neighbourhood. So, if all the houses went up by an average of six per cent, that is applied to every other house in that neighbourhood,” said Wulff. “That’s why there is an appeal process in place.”
Also, any major construction is considered when determining market value. Assessors visit properties that are granted development permits.
Overall, residential taxes saw an average increase of $96, with some properties seeing less and others more.
The increase is largely due to increases in both the Education Tax and Drumheller and District Seniors Foundation requisition, neither of which the Town of Drumheller has any control over.
Residents wishing to appeal their assessment may do so at Town Hall by filling out an appeal form.