Condo owners in Calgary may have done a double-take when they received their annual property assessments from the City of Calgary this month. A recent Calgary Herald article reports that condominium values have gone up 22% as compared to 18% the year before.
That means the owner of a condo worth $359,000 should expect to pay $12.77 more in tax each month than they did in 2024. According to city assessor Eddie Lee, high net migration to Calgary was the main driver behind the city’s “strong sales and high market demand,” along with improving job conditions and wage growth.
“The condominium market has experienced a surge in interest, with these more affordable homes appealing to buyers,” he explained. “This has resulted in higher sales volumes, rising prices, and quicker turnaround times on the market, all contributing to this shift.”
Condo owners aren’t the only ones who saw the value of their properties rise in their assessments. The typical value of single-family detached homes went up by 14% as compared to 10% in 2023. On average, the value of a residential property in Calgary increased by 15% year-over-year.
Property assessments versus actual real estate values?
A property assessment is a valuation carried out by local authorities to determine a property’s worth for taxation purposes, based on factors such as size, location, and amenities.
In contrast, real estate value represents the market-driven worth of a property, determined by what a seller is willing to accept and what a buyer is willing to pay. This value reflects broader market trends, recent sales, and the property’s condition, offering a snapshot of its market appeal. While property assessments are used to calculate tax obligations, real estate value plays a key role in buying, selling, and investment decisions.
In short, you can’t predict the market and a high property assessment does not guarantee someone will be willing to pay the same amount to purchase your property. However, they are decent tools to set a ballpark figure that you can then discuss with your real-estate agent, who will have access to much more information about the market in your area, what condos are actually selling for, and what you might consider pricing yours at to be competitive.
How are property taxes calculated?
The formula used to calculate property taxes is complicated. To determine the amount of revenue needed from property taxes, the City calculates its total expenditures and subtracts all other revenue sources, including license fees, permits, user fees, and provincial grants. The remaining amount is what must be raised through municipal property taxes.
With your assessment in hand, you can use the City’s Property Tax Calculator to figure out what you will be paying this year. On the same page you will also find where property tax dollars actually go, with the majority (34%) going to the Government of Alberta. Operating funds for municipalities are then distributed back to cities through the parameters of the Municipal Government Act.
Municipal residential taxes also go towards services such as public safety and bylaws; transportation; parks, recreation and culture; social programs and services; planning; utilities, information and communication and more.
What does a higher property assessment mean?
A high property assessment can mean different things to different people, depending on your situation. If you’re thinking of moving, a higher valuation is a good bargaining chip for negotiations. If you’re just going to stay put for a while, a higher property assessment quite often, sadly, means higher taxes and potentially more belt tightening.
Property assessments can be challenged
For Calgarians wishing to challenge their assessment notices, the City’s customer review period will run until March 21. Homeowners can utilize the secure assessment search tool to scrutinize your condo property assessment and request additional assessment information. Then, if you still believe your property has been assessed at a higher value than it should have been, you can file a complaint with the Assessment Review Board (ARB), which is separate from The City of Calgary, until March 21. The complaint form, complaint agent authorization form, and more information are available at calgaryarb.ca or 403-268-5858.
What a high property assessment means for your condo insurance
If the value of your condo has risen substantially since your date of purchase, it’s a good idea to revisit your condo insurance to make sure you still have the coverage you need. If something happens, you don’t want to discover that your limits don’t cover the amount needed to pay for damages and repairs.
A basic condo insurance policy covers:
-
Personal belongings located in privately owned parts of the building, including your unit, your storage locker and your parking spot.
-
Personal liability against accidents or injuries that occur in your home.
-
Repairs needed after incidents caused by a specifically insured peril, such as a fire.
Additional coverages we recommend are for additional living expenses should your residence become uninhabitable following a covered loss, voluntary medical payments to cover for medical expenses for minor incidents that occur on your property, and loss assessment protection against valid special assessments.
A special assessment (also known as a special levy) is a supplementary charge that can be imposed upon homeowners in addition to regular condo fees. They are often levied to perform repairs to issues with building envelopes, foundations, roofs and common areas when there is not enough capital in the condo association’s operating budget or reserve funds. It is not uncommon for special assessments to soar into the tens of thousands of dollars, which means coverage can make a massive difference and provide exceptional peace of mind.
In addition, don’t forget that as of 2020 all condo owners require deductible insurance along with their condo insurance. Since then, condominium corporations are allowed to require owners to pay the entire building’s deductible amount for claims where the damage can be proven to have originated in a suite or a private area, such as a storage unit or an owned parking spot. This means that for an incident such as a toilet leaking in your unit that causes damage to the building’s structure or to another unit, or for a fire that starts on your balcony and spreads, regardless of whether you were negligent you will more than likely be on the hook to cover up to a maximum of $50,000 for your condominium corporation’s insurance deductible. This is why coverage is mandatory.
Low condo insurance rates from Lane’s of Alberta
At Lane’s Insurance, we know that most condo owners are very responsible and are entitled to the protection their policies provide. How we differ from the others, however, is that as brokers we have the ability to shop for your policy for you, compare rates and policies, and obtain the very best coverage for you at the very best rates. In addition, we are always willing to help explain the parameters of your policy at any time and gauge if you still have the coverage you need.
If you have any questions about your condo insurance, or would like to inquire about your options, contact us at our Calgary, Banff, Edmonton, or greater Alberta offices to see what we can do for you.
