City council has given first reading to the 2013 property tax bylaw.
If approved, this means an increase of 2.24% for residential property, 1.48% for multi-family property and 6.67% for non-residential property.
For the 2013 tax year, the City will collect more than $39 million in property taxes on behalf of the Government of Alberta for education funding, an increase of $1.5 million over last year.
“The City is required under legislation to collect education taxes at the tax rates mandated by the province to fund education, and that is having an impact on the total tax increases this year,” said Joanne Parkin, revenue and assessment services manager.
If approved, the tax increase means a residential home assessed at $300,000 for 2013 that has experienced the average change in assessed value would pay an increase of $4.74 per month and bring the total annual tax bill to $2,607 from $2,550.
“Our municipal taxes are used for services ranging from maintaining our roads and parks to providing police and emergency services,” said Parkin. “It’s about collecting enough to provide services for Red Deer residents.”
Councillor Chris Stephan said the proposed tax bylaw was unfair to non-residential property owners.
“When you work out what it will be on an annual basis, if you own a residential you are looking at an average increase of $57, if you own a multi-family property worth $300,000 you are looking at an increase of $39 on your tax bill, but if you own a $300,000 commercial property, you’re taxes are going to go up $300,” he said. “It’s not fair that commercial is paying twice as much as multi-family. They are both businesses, some multi-family businesses don’t run a profit, some commercial businesses that don’t provide housing don’t run a profit. To me a business is a business and if we’re going to go back to rentals, that’s a business too. They should be paying commercial property tax rates as well.”
Councillor Dianne Wyntjes said if council was to follow Stephan’s suggestion, residential property owners would pay the price.
“If we were to follow Councillor Stephan’s logic, our tax payers on the residential side would pay a fair amount.”
First reading of the bylaw passed with Stephan voting against it.
After receiving first reading, the tax rate bylaw will come back for consideration of second and third readings during a special council meeting next Monday.