The Phased Tax Program is a property tax rebate program to assist non-residential taxpayers

The City of Calgary’s economy is still feeling the effects of low oil prices that have inadvertently caused significant vacancy and oversupply in Calgary’s downtown office buildings. This unusually high vacancy has resulted in a roughly 40% decrease in assessed value of downtown core properties since 2016.

Combined with flat or increasing values in the suburban retail and industrial sectors has relocated a significant portion of the tax burden from the downtown area out to the suburbs. On March 19, 2018, the City of Calgary approved, for the second year in a row, a property tax rebate program to assist non-residential taxpayers impacted by tax increases due to these extraordinarily large shifts in market value.

The 2018 Phased Tax Program (“2018 PTP”) is similar to the PTP rebate offered in 2017, where the municipal portion of the property taxes (excluding the business tax consolidation) will be capped to a maximum of 5%. The City expects that any rebate to the property taxes paid by a landlord will be passed to the tenants.

For more information please visit the city’s PTP page found here:

http://www.calgary.ca/PDA/Assessment/Pages/phased-tax-program.aspx

Below are some frequently asked questions that have been posed to our experts regarding the 2018 PTP rebate.

Q: How do I know if my property is eligible?
A: To be included in the 2018 PTP, your property must:

  • Have existed in 2017
  • Be taxable
  • Have an assessment class of greater than 50% non-residential
  • Have municipal non-residential taxes greater than $50
  • Have a PTP rebate greater than $25

Q: Are there any other catches?
A: Yes: the change in assessment must be the result of a market value increase alone. Any changes to the assessment due to non-market forces such as physical changes to the property like servicing, factual corrections, zoning changes, additions, etc. will exclude the property from the rebate.

It is also important to note that this rebate caps the municipal taxes at a 5% increase from where they would have been without any rebates in 2017.  Essentially, the 2017 PTP will delay a 2017 tax increase to 2018, and the 2018 PTP will delay a 2018 tax increase to 2019 if an assessment is relatively constant or steadily increasing.

Q: How do I calculate any potential rebate?
A: For information on calculating your potential rebate please see the city’s tax calculator found here: http://www.calgary.ca/PDA/Assessment/Pages/Revenue-neutral-policy-and-calculator.aspx

Q: What will my final taxes be?
A: City Council set the 2018 mill rate at 0.0194264, so the calculation will be:
Taxes = (2018 assessment x 0.0194264) – the rebate as calculated above.

Q: When do I get the rebate?
A: The rebate will be applied to the 2018 tax bill if no 2017 or 2018 assessment complaints are in process.  If there are complaints in process it will be applied at the conclusion of outstanding 2017 and 2018 complaints.

Q: How is the rebate distributed?
A: The rebate is distributed based on the increase in the assessment from 2017 to 2018.  For example, a property with a greater increase will have a greater rebate.

Q: Does a 2017 CARB decision influence the 2018 rebate?
A: Yes. As the rebate is based on the difference between the final 2017 assessment and the final 2018 assessment, a 2017 CARB decision reducing the assessment would result in a greater rebate than a similarly assessed property without a 2017 CARB decision.

Q: If my property is currently eligible, can it become ineligible?
A: Yes.  Like above, as the rebate is based on the difference in final assessments, a 2018 CARB decision reducing the assessment (and taxes) below the 5% increase in municipal tax would result in no rebate.  In this case, the overall tax burden will still be lower than with the rebate, due to the provincial portion of property tax that is not rebated at all.

Q: Is there a formal complaint process if my property is ineligible and I disagree?
A: No. As the rebate is an administrative decision from the City of Calgary, it exists outside the formal assessment appeal process.

Q: If the City appealed my 2017 CARB decision am I eligible?  If not, when do I become eligible?
A: Properties with 2017 CARB decisions appealed to a higher court are not eligible for the PTP rebate until the court appeal is concluded and the assessment is finalized.

Q: I received a rebate in 2017, am I still eligible for a rebate in 2018?
A: Application of a 2017 rebate has no effect on the application of a 2018 rebate.

Q: If this is a cap at a 5% increase, why are my taxes up more than 5%?
A: Property taxes are paid to both the municipal and provincial levels of government.  The total tax rate is estimated to be 0.0194264, which is comprised of municipal (0.0153234) and provincial (0.0041030) portions.  The City of Calgary is not rebating taxes on the provincial portion of the tax rate, nor the portion of the tax rate for the BTC.

This is compounded by the effect of the 2017 PTP, which froze municipal taxes at 5% of 2016.  For a property with a 10% assessment increase from 2016 to 2017 and another 10% increase from 2017 to 2018, this would result in an actual increase of taxes from 2017 to 2018 of 18%, not 5%