A Tale of Two Cities: Residential property assessments and appeals in Calgary and Vancouver.

• Author: Bowal, Peter

Commercial and residential property taxes are by far the largest source of revenue for Canadian municipalities--about one third of the budgets in large cities. Other revenue streams include provincial grants and licenses, permits and user fees.

Residential accommodation is taxed on market-based values. Municipal assessors annually determine and issue an assessment for each property. The mill rate (based on "mills") is the amount of tax payable per $1,000 of the assessed value of a property. The higher the assessment, the higher one's annual tax bill will be. Therefore, municipalities have an appeal procedure for the property tax assessment.

This article studies the residential property assessment and appeal processes in Calgary and Vancouver.

Assessment Process

Assessment Process in Calgary

The City of Calgary Assessment Unit handles residential property assessments. Alberta's Municipal Government Act governs assessment protocols. Assessments are based upon the property's estimated market value on July 1st of the previous year. Most residential properties are assessed with the sales comparison model. In other words, people on the same street whose houses are about the same size, age and value will be assessed at about the same value for tax purposes. If a representative house in the neighbourhood has sold in the previous year, that selling price will become the new baseline value for that neighbourhood with similar properties.

By contrast, commercial properties are assessed on the income they generate or a cost approach that recognizes the land value plus depreciated replacement cost for improvements.

Calgary conducts a mass appraisal that evaluates location, structure type, size of the structure and lot, as well as any influencing factors such as a view, proximity to green spaces and traffic. Once total property tax is billed and collected, Calgary remits about 40% to the provincial government.

Assessment Process in Vancouver

The provincial BC Assessment organization assesses all properties in Vancouver (and all of B.C.) pursuant to B.C.'s Assessment Act which outlines the rules and procedures. Appraisers collect information typically following construction but at other times too, such as after a renovation. The organization analyses property sales for provincial and local housing markets to obtain an up-to-date understanding of property markets for a reference date (also July 1st of each year). BC Assessment then creates and distributes...