Property taxes are a main revenue stream for municipalities and in Alberta, property taxes for any given home are determined by the value of the property itself. Paying your property taxes helps cover the cost of things like garbage collection, water and sewer services, construction, maintenance, park maintenance and even fire and police protection.
The Property Assessment
Each year you receive this notice that shows you the approximate value of your property and the property taxes you can expect to be charged in the coming year for it. The property assessment is the fairest way your municipality can distributed the tax burden amongst property owners in any given municipality. The ‘Assessment’ gives the municipality a dollar amount from which they can determine the amount tax owed.
When you buy a home
It’s important to consider property taxes when you purchase a home. Some municipalities have much higher property taxes than others, which can sometimes make a particular area unobtainable. The year you purchase a home, it is usually on your shoulders to pay the property taxes up front and in full. You can have your mortgage designed so that each month a portion of what you pay is for your property taxes, and therefore the following year you will have enough money saved that your bank can just pay your taxes for you.
In the event you are unprepared to pay your taxes in full during your first year of homeownership, you can have that cist also rolled into your mortgage, on top of payments for future property taxes. This can increase your monthly mortgage payments to a point of unaffordability – so be careful. Be sure to discuss all your mortgage options with your lender, where property taxes are concerned.