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Alberta property tax - increases coming for 2023, appeal deadlines in March

Insight hero image Alberta property tax Increases coming for

February 27, 2023

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The annual assessment update for Alberta has resulted in assessed value increases for commercial properties overall. Coupled with municipal budget increases, property taxes are set to rise substantially in some sectors. Property owners should be sure to review each assessment prior to the upcoming appeal deadlines to ensure they don’t miss an opportunity to reduce operating costs for 2023. Impact of pandemic pricing, inflation, but not the interest rate hikes.

The province of Alberta mandates annual reassessments, and property owners are entitled to appeal each year. The assessment process is administered by the municipality, and the assessment notice and appeal deadline dates vary from city to city, and from year to year. The deadline to appeal is always 60 days from the notice date, which is not the same date the notices are mailed. This year, the deadline to appeal is March 13 in Calgary, and March 24 in Edmonton. Notice and appeal deadlines for additional municipalities and Designated Industrial Properties are provided at the bottom of this article.



Key upcoming property assessment appeal deadlines for Calgary and Edmonton


  • Calgary property assessment appeal deadline - March 13, 2023

  • Edmonton property assessment appeal deadline - March 24, 2023



Alberta property tax assessment changes – Calgary and Edmonton


Overall, assessed values of non-residential properties increased by 2% in Calgary, and 6% in Edmonton. The multi-family sector is facing average increases of 13% in Calgary, while the overall increase for multi-family in Edmonton was a modest 1.9%. Assessed values of industrial properties, particularly large premium warehouses, are increasing by more than 9%. Results for office and retail are mixed, depending on location and building quality.



Office


In Calgary, the office sector saw yet another year of contraction, down 3% over 2022. In the suburban office sector, assessments for class AA and A properties decreased, due in part to a flight to quality back to the downtown core which resulted in increased vacancy and cap rates. In the downtown core, AA+ and A+ class assessments increased for the first time in several years, showing initial optimistic signs of a start to the long road to recovery ahead. The increases in these asset classes were offset by B and C-class downtown values, as well as the aforementioned losses in the suburban market, resulting in the overall decline for this sector. By contrast, in Edmonton, assessments of downtown office space dropped by 3.8% overall, while values of suburban office climbed 8.3%.



Multi-family


Assessed values for multi-family properties in Calgary increased by an average of 13%, as increased rental rates, decreased vacancy rates and strong sales activity impacted all assessment parameters. As a result, property tax increases are expected for all classes of multi-family property. In Edmonton, assessments of the multi-family sector increased by only 1.9% as a whole, following a 3.1% increase for this sector in 2022.

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Industrial


The reassessment resulted in an overall increase of 3% for the industrial sector in Calgary, however properties larger than 100,000 square feet averaged a 6% increase in assessed value, with premium properties gaining 9% on average. Vacancy rates for industrial property are below 3%, and there is a high demand for new inventory. Similarly, Edmonton industrial saw a 9.2% overall increase for industrial, after the assessment for this sector had dropped by 1.5% in 2022.



Retail


Assessments of retail properties in Edmonton have jumped by 12.7%, fueled by the removal of adjustments for COVID-19. In Calgary, the overall increase for the retail sector is 4%, however there are some significant increases for some properties, as the assessor has compressed cap rates across all strip and neighbourhood shopping centers and assessed vacancy/collection loss adjustments have dropped citywide.



Property tax implications for Calgary and Edmonton


Regardless of any value change due to reassessment, average property tax rates in both Calgary and Edmonton are set to increase. The City of Calgary has budgeted a 4.4% tax levy increase, and Edmonton 4.96%. The provincial portion of the tax levy has not yet been determined. If the assessed value of your property has increased by the average rate, your tax increase will reflect these levy increases.

This means that for Calgary, a non-residential property with an assessment increase of 2% will see a tax increase of 4.4%. In Edmonton, an assessment increase of 6.1% will result in a tax increase of about 4.96%. If the assessment increase is greater than the average overall rate, the tax increase will be greater.



Challenges and opportunities


In general, assessments of properties valued using the Cost approach, such as industrial and warehouse properties have increased dramatically. Cost factors used by the assessor have increased to reflect the significant inflationary pressures on the cost of construction, tied to increased prices in 2022 for lumber, concrete, and structural steel. Market values may not have risen in proportion to costs, resulting in overassessments.

For many income-producing properties, assessed values have increased due to compressed capitalization rates. These rates have been established based on sales that took place prior to the rise in interest rates. Additionally, assessors have removed COVID market adjustments on many retail properties. Market evidence does not support some of the aggressive value increases seen in these sectors.

When filing appeals in Alberta, you must include evidence supporting the reduction in assessed value being sought. It is important to initiate a review of your assessment as early as possible to make the most of your appeal opportunity.



Alberta property assessment dates and appeal deadlines by municipality


Municipality

Assessment date

Assessment appeal deadline date

Calgary, City of

January 4, 2023

Monday, March 13, 2023

Edmonton, City of

January 16, 2023

Friday, March 24, 2023

Lethbridge, City of

January 4, 2023

Monday, March 13, 2023

Okotoks, Town of

January 4, 2023

Monday, March 13, 2023

Red Deer, City of

January 5, 2023

Tuesday, March 14, 2023

Strathmore, Town of

January 11, 2023

Monday, March 20, 2023

Camrose, City of

January 20, 2023

Tuesday, March 21, 2023

Airdrie, City of

January 13, 2023

Friday, March 24, 2023

Cochrane, Town of

January 20, 2023

Friday, March 31, 2023

Jasper, Town of

January 30, 2023

Friday, March 31, 2023

Leduc, City of

January 26, 2023

Tuesday, April 4, 2023

Grande Prairie, City of

January 26, 2023

Tuesday, April 4, 2023

Strathcona, County of

January 27, 2023

Wednesday, April 5, 2023

Rocky View, County of

January 27, 2023

Tuesday, April 11, 2023

Stony Plain, Town of

February 2, 2023

Tuesday, April 11, 2023

Fairview, Town of

January 30, 2023

Tuesday, April 11, 2023

Spruce Grove, City of

February 3, 2023

Friday, April 14, 2023

Designated Industrial Property (non-linear)

February 28, 2023

Monday, May 8, 2023

Designated Industrial Property (linear)

January 31, 2023

Friday, April 14, 2023

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Josh Weber

Managing Vice President

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Josh Weber

Managing Vice President

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