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Assessor meets with council, explains property taxes

Posted on November 30, 2023 by Vauxhall Advance

By Cal Braid
Vauxhall Advance
Local Journalism Initiative Reporter

At the Nov. 20 Vauxhall council meeting, Ryan Vogt of Benchmark Assessment Consultants explained how he, as the Town’s property assessor, evaluates the property taxes that represent a major source of revenue for local governments.

A property assessor is employed by the municipality, and in the case of Vauxhall, the Town contracts an assessor rather than having one on staff. It’s a more cost-effective way of deriving values for all the properties in the municipality. “Property assessment is essentially the cornerstone of municipal financing,” he said. “Our mandate is to apply a market value within a reasonable range for every property within the municipality.”

The Town’s designated assessor is appointed by the municipality and must have qualifications in one of three designations (AMA, CAE or AACI). Assessors assign a dollar value to each property for tax purposes. Based on legislation, dollar value can be the market value or a regulated value.

Vogt said that ratepayers, to their dismay, are often subject to an assessment that includes ‘improvements.’ “I get calls (from people) saying, ‘Hey, I didn’t improve my property this year.’  Essentially, all improvement means is a house, a garage or an outbuilding that’s on the property.”

“Not every property is valued at market value,” he explained. “Regulated values are set by the province for property types assessed with regulated rates. Those rates apply to farmland,  railway property, machinery and equipment, as well as linear property. So these types of property, for various reasons, are difficult to assess using regular market value standard. They are done using a regulated rate.”

In addition, not all property is assessed for taxation purposes. Water treatment plants, farm buildings, airport improvements, and travel trailers aren’t included. There are four classes of property: residential (the vast majority), non-residential commercial and industrial, farmland, and machinery and equipment.

He told council that assessment standards are defined by the Municipal Government Act (MGA) and Matters Related to Assessment Taxation (MRAT). These specify the methods and standards that must be met when assessments are prepared. Assessments based on market value must be prepared using mass appraisal.

“What that really entails is looking at trying to compare apples to apples,” he said. Newer homes built in the last 10 years aren’t compared to houses built 50 years ago. Houses of the same age are typically compared against one another for assessment purposes and mass appraisal also extends to valuing home size.

“Mass appraisal allows the assessor to accurately evaluate a large number of properties in a short period of time. In other words, rather than doing a single property assessment for every single property in town, we would look at properties as a group and evaluate them that way,” he said. “What we do is we look at the valuation and condition date. In Alberta, there are two key legislated dates that certain assessment processes must be completed: there’s the valuation date and the physical condition date.”

He said that when a ratepayer gets their assessment each year, the valuation date is July 1 of the previous year, so an assessment received in May 2024 will reflect market conditions as of July 1, 2023. “Things are a little bit behind when it comes to the assessment cycle.”

The physical condition date is Dec. 31. “Where that really plays a role is when you’re either building a new house or maybe adding a garage, and it’s only half done at the end of the year, you’re only assessed half that value.”

For a smaller town, when the assessment report is prepared, it focuses on finding a range of values within common or similar groupings. In general, the cost of constructing a new building  plus the market value of the land minus depreciation is the assessed value.

He said farmland “is a bit of a tricky one.” It’s not assessed at market value. A typical farm property is based on a regulated rate set by the province–directly related to the production capability of the soil. “Irrigated farmland at $450 per acre, or non irrigated farmland at $350 per acre is clearly not market value. These values were set probably in the neighbourhood of almost 40 years ago and the province really hasn’t updated those numbers. That being said, there wouldn’t be a lot of farmland within an urban municipality but there is some. Typically what happens with that is if you do have farmland it’s going to have a very low assessed value on it.”

“A lot of places have looked at their tax rates to try to figure out what to do. Municipalities don’t want to punish people for having that farmland, but at the same time the regulated value is way below the actual value. But it’s something councils consider when looking at farmland mill rates.”

In the Province of Alberta, including the M.D. of Taber, there is a rural assessment policy (RAP) on farm residences to provide a small tax break through the assessment process.

Vogt said that he has to submit his data to the province. “I have an auditor just like the Town would have accounting auditors, and the auditor would make sure that I’ve assessed the properties properly to make sure that everything is equitable.” Each year his data must be submitted by Feb. 28 so that the auditor can look at it well in advance of when municipalities are setting their budgets. Approximately every five years, Municipal Affairs will conduct a detailed audit.

Ratepayers are entitled to submit assessment appeals, and Vogt said his discussions with those ratepayers are often fairly simple. Ratepayers usually either have a valid case or they don’t. If they have a case, he’s willing to make an amendment, but if both sides can’t come to an agreement, it goes to an appeal board.

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