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Figuring out municipal assessment.

I just finished getting my taxes together for my accountant, one of my very favourite people at this time of year. I am of the opinion that if you want a professional job done of something, you should have a professional do it!

Why am I telling you this? When I was gathering all of my paperwork, part of the gather included my property tax assessment. Because my husband runs a business for which he has a shop on our property, part of the taxes are attributable to the company.

Looking at the assessment reminded me that this article was due! It also brought to mind how municipalities calculate tax assessment, and because I can never remember the ins and outs of the mill rate, or even what that is, I thought we could do a little research together and find some answers.

Who is in charge of municipal governments?

In Alberta, like most other provinces, there is a provincial government department that gives municipal governments rules and advice. From the Municipal Affairs website ( out_us/index.cfm):

"The Ministry of Alberta Municipal Affairs is responsible for:

* Supporting good government at the local level

* Ensuring that Alberta communities are safe and self-reliant"

Self-reliant likely means self funding. There is a branch of Municipal Affairs devoted to municipal assessment.

What does Assessment Services do?

From mahome/as/index.cfm:

"The Assessment Services Branch helps to ensure that Albertans have an effective and efficient system of assessment and property taxation. It works in partnership with local governments, assessment professionals and other stakeholders. "Assessment is the process of placing a dollar value on a property for taxation purposes. Property taxation is the method of applying a tax rate to a property's assessed value to determine the taxes payable by the owner of that property. Property taxes are a main source of revenue for Alberta municipalities. "The property assessment process is important to property owners and to their local governments. If an assessment is too high, for example, it will be unfair to the owner. If an assessment is too low, local governments lose an important source of funding for community services and facilities.

"The branch's roles are to:

* provide advice and information on assessment and property tax matters to municipalities and taxpayers

* ensure that related legislation, regulations and assessment practices are current and effective

* recommend revisions, as required, to legislation, regulations and assessment practices

* establish standards for property assessments in Alberta

* prepare assessments for all property defined as linear (for example: oil and gas pipelines and cable television systems)

* periodically review each municipality's assessment procedures and identify areas for improvement

* calculate the amount that each municipality is to contribute to Alberta's public education system, and

* calculate each municipality's equalized assessment, which is used to determine its portion of cost-shared programs.

There are some very interesting publications available on the site above, including

* Is your Property Assessment Fair & Accurate?

* Guide to Property Assessment & Taxation in Alberta

* Preparing for your Assessment Complaint or Appeal Hearing

The Guide was especially useful as it cleared up a question of mine regarding the difference between assessment and taxation:

"'Assessment' is the process of placing a dollar value on a property for taxation purposes. This value is used to calculate the amount of taxes that will be charged to the owner of the property. 'Taxation' is the process of applying a tax rate to a property's assessed value to determine the taxes payable by the owner of that property."

What else does the Guide say?

Market Value Assessment

In 1995, the Municipal Government Act was rewritten. This legislation governs most aspects of municipal law, including taxation. Assessment review committees in the early 1990s recommended that Alberta's property assessment system should be changed from the fair actual value system to a market value-based system. Also, some court decisions during this time indicated that assessments should reflect current market values.

Market value is the price a property might reasonably be expected to sell for if sold by a willing buyer after appropriate time and exposure in an open market.

Market value changes with the economy. This basic factor allows for better control over fairness of taxation. Different types of properties have different assessment approaches. Residential properties are assessed based on the sales amounts of similar properties.

Who prepares assessments in Alberta?

Assessments for all types of property are prepared by professional, certified assessors. Assessors receive training in a variety of areas including property valuation techniques, legislation, and quality assurance. Assessors who are employed by the province prepare the assessments for linear property, while assessors who are employed by municipalities prepare assessments for all other types of property.

Under provincial legislation, a municipality must list at least one designated assessor. A designated assessor is responsible for completing a number of tasks laid out by provincial legislation and regulations. To be the designated assessor for a municipality, an assessor must hold at least one of the following professional designations:

* Accredited Municipal Assessor of Alberta (AMAA) as granted by the Alberta Assessors' Association,

* Certified Assessment Evaluator (CAE) as granted by the International Association of Assessing Officers, or

* Accredited Appraiser Canadian Institute (AACI) as granted by the Appraisal Institute of Canada.


You can see that fairness and equity are the principles of our taxation system. The Municipal Affairs website is full of valuable information about how the process of taxation and assessment works in Alberta. As Joel Fox once said (paraphrasing Benjamin Franklin): "Nothing is certain but death and taxes. Of the two, taxes happen annually." At least, Canadian municipalities design their systems for fairness.

Shaunna Mireau is a library technician with Field Law in Edmonton, Alberta.
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Title Annotation:online law
Author:Mireau, Shaunna
Geographic Code:1CANA
Date:Aug 1, 2005
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