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City property assessments mailed out
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By Lori Larsen
City of Camrose property owners will be receiving their 2021 Notice of Assessments in the upcoming days. According to a report presented to City of Camrose council by the City’s Assessment manager Travis Lantz, the notices were sent out to all property owners on January 13.
Following the assessment notices, the tax notices will be sent to property owners in May. During the January 17 Committee of Whole meeting, Lantz fully explained the fundamentals of property assessment to council.
Lantz began by describing assessments. “An assessment is putting a dollar value on every property in the City, and a new assessment is calculated every year for every property. For most properties, that is an estimate of the market value.”
He added that the market value is the most likely sell price that the City thinks a property would achieve on the open market with a willing buyer and willing seller.
“When we talk about market value for assessment purposes as per legislation, they are all based on July 1 of the previous year. For the notices mailed last week, it is based on the value of the property on July 1, 2021, and we would look at sales leading up to that point in time.”
Lantz said the only wrinkle to that consideration is that the City looks at the condition of the property up until the end of the year. “Where this comes into play is, for example, if somebody adds a garage in October or November, that would be in their current assessment or visa versa, if, unfortunately, somebody’s home burned down this fall.”
Lantz said that according to legislation in Alberta, properties are broken down into four basic types which consist of: residential (approximately worth $2.14 billion in Camrose); farmland (approximately $1 million in Camrose assessed at $350 an acre, not at market value); nonresidential including commercial and industrial ($622 million in Camrose) and machinery and equipment property used for manufacturing or processing (approximately $72 million in Camrose), which Lantz indicated was exempt from taxation by council 40 years ago.
“Essentially 75 per cent of our tax base is residential property, 22 per cent is non-residential and a 2.5 per cent machinery and equipment which we have elected to exempt.”
According to the report, the change in overall assessed value for the City of Camrose is as follows: • Residential for 2021– $2.036 billion; 2022– $2.142 billion with a change in total market value of 4.65 per cent and a change from growth of 0.55 per cent. • Non-residential for 2021– $615 million; 2022–$622 million with a change in total market value of 0.13 per cent and a change from growth of 1.02 per cent.
“This is the total increase and it is not uniform. It is going to be different for every property in the City.”
He said overall residential property values saw varying increases, while non-residential property values continued to meet challenges.
Assessment growth
Lantz discussed the growth in the assessment roll from new construction in 2021. “This level of growth should meet or slightly exceed budgeted estimate of $150,000 tax dollars from growth,” said Lantz. “But it is not going to be any type of financial windfall that will allow us to dramatically lower taxes. We would need to see a higher level of growth than that.
“The growth has been in a downward trend for awhile, particularly the residential. In 2015, we had about $40 million in residential new construction, versus the $12 million we had this year.
“The non-residential is somewhat holding its own. The thing that has caused the decline in growth revenue is the dropping off of residential construction in the last three or four years.”
Assessment process
Lantz said the assessment is prepared by starting with an assessment roll, a data base of all 9,000 properties in Camrose that contains a list of attributes describing every property in the City including: descriptive (address, legal description, owner’s name, land title number, zoning); quantitative (lot size, size of improvements, age of improvements, amount of basement development) and qualitative (condition, quality).
He further explained that the City assesses properties through statistical modeling, where properties are grouped together and their models adjusted for the differences in properties. “We primarily look at comparable sales. When we get into commercial and industrial properties, we look at income. How much income does this property generate as a rental, not how much income does the business make, but how much would the landlord generate renting out this property and a cost approach. How much would it cost to acquire the land and rebuild this property again.
“When we look at sales to value property, we typically look at the three years leading up to July 1,” said Lantz. “We get all our sales information from land titles, analyze them and determine good sales.”
He said that another big part of preparing assessment roll is having good data on every property in town, which the City accomplishes in a variety of ways including: in-person inspection of the interior of the property; in-person inspection of the exterior of the property; phone interviews with property owner; requests for information (RFI) mailed-out survey asking the property owner to describe the property; review of MLS information; review of aerial photography; and review of building plans, permits and other data available to the assessor.
“Partially because of the pandemic, but also partially in an effort to seek efficiency, we have really dramatically moved away from going into as many properties and have become far more focused on mailing surveys to property owners and having them self report.”
He said that the City has made every effort to make self-reporting as convenient as possible for all residents, including online surveys (vps.camalot.ca/ rfi) that can be processed immediately, mailed in or the City can be contacted via telephone (780-6724426). “We are very open to working with property owners with whatever they prefer, whatever gives them the most comfort level.”
He explained that the purpose of the inspection is to review the data for each property including: the condition of improvements, amount of basement development and renovations.
Lantz added that the best practice recommendation from the province is to have a five-year cycle for inspections, with approximately 20 per cent of the properties in the City getting inspected annually.
“On the commercial/ industrial property, nonresidential side of things, we also mail them annual correspondence. Unlike residential, the City does not ask them to describe their property; we are looking for information about the rent, vacancy, expenses, all those things that go into the income models that
help us assess commercial properties.” Lantz said that this information is collected annually on commercial and multi-family properties, giving property owners the option of returning the information in what“Essentially, 75 per cent of our tax base is residential property, ever format is most convenient to them and keeping the information strictly said City of Camrose assessment manager Travis Lantz. confidential. Appeal process According to Lantz, the mailing of assessments last week kicked off the 67-day (as per provincial legislation) period when property owners can file an appeal if they feel they have been accessed incorrectly or unfairly. The right to appeal ends on March 22. “The Assessment Review board is an impartial board,” explained Lantz. “For residential property owners, it is made up of three local volunteers from the community, and for nonresidential complaints, it is made up of two volunteers from the community and a provincially-appointed chair, who does not live in the municipality.” Lantz said that typiCity Hall cally the City sees more appeals on the non-residential property assessments, which he indicated may be the result of Property Tax Agents appealing assessments on behalf of the large non-residential property owners, with a goal of gaining a financial savings. “Challenges that come from assessment appeals vary wildly,” noted Lantz, adding that in 2017, approximately eight or 10 non-residential property owners (mostly) were pursuing roughly $500,000 in tax decreases. “Obviously, we had a significant risk there of having a $500,000 hit to our tax levy, where in 2018, we ended up with zero appeals, so zero risks. These wild, unpredictable levels of appeal risk were really our main driver in separating out the assessment and tax notices in trying to get a better understanding of what sort of appeals and assessment changes we would be facing much earlier in the year and possibly before we set “ The growth has been in a downward trend for awhile, the tax rates.” Lantz said that the City has particularly the residential,” said City of Camrose assessment had great success in the last four years defending manager Travis Lantz. against tax assessment appeals with little to no tax dollars lost under appeals.
Important dates
Residents will have until March 22 to appeal property assessments. In March/April, council will approve the 2022 tax rates. In mid-May, tax notices will be sent out with the deadline for tax payment on June 30.
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