Council passed the 2011 tax rate bylaw on Monday that sees residential property owners pay an average increase of 3.9%.
That means owners of an average residential property assessed at $300,000 will pay an extra $7.75 a month or $93 a year. The average tax bill would go from $2,373 to $2,466.
The bylaw, which combines municipal, education (collected by the City for Alberta Education) and a Piper Creek Foundation requisition increases multi-family rates by 5.9% and non-residential (commercial) property rates by 4.3%.
Councillor Chris Stephan was the only councillor who voted against the bylaw.
He feels multi-family property owners, who operate apartment buildings for example, should pay the same tax rate as commercial property owners. He introduced a motion to do this, but it was defeated by council.
“You are favouring one business over another and too me it’s not right,” he said.
“Because it’s a business for profit, it should be treated like a for profit business. A favourable commercial situation, which we have in Red Deer, benefits everybody. Low taxes attract business. And it would lower residential taxes too (in the long run).”
Councillor Tara Veer, who voted in favour of the bylaw, said “I had some personal challenges with it. But I think overall we achieved fairness.
“As far as the tax level in general, I think we have a lot of work to do on that front because I was really concerned about the cost of our property tax regime in general as well as our utility charges.”
She made a recommendation for a tax rate bylaw report to be referred to the City’s Governance and Policy Committee, which was approved by council. The motion asks for a look at the ratio of taxation between residential, non-residential and multi-family property tax classes. That report is expected by the end of October. Other councillors, like Dianne Wyntjes, Buck Buchanan, Lynne Mulder and Paul Harris, felt the approved tax bylaw was fair and balanced.
In January, City council approved $94 million dollars in tax funding for City programs and services, which the bylaw provides.
“While many residential property assessments went down this year, that doesn’t mean residents’ property taxes will go down too,” said Joanne Parkin, Red Deer’s revenue and assessment services manager. “A reduction in your assessment does not equal a decrease in your property taxes.”
Property tax notices will go out as soon as possible, probably late May and tax payments are due the last day of June. Paying on time avoids late payment penalties. Many homeowners use the City’s Tax Instalment Plan (TIP) and pay their City taxes in monthly instalments.
According to information supplied by City administration, only Medicine Hat has lower tax rates than Red Deer among larger Alberta cities. As well, a recent survey showed 88% of respondents to a City survey indicated that they receive good value for their tax dollar.