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The Assessment Monitor - January 2008
Rickard Realty Advisors Inc.
Report on Calgary Property Tax & Assessment Matters |
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The Assessment Monitor - January 2008
Rickard Realty Advisors Inc.
Report on Calgary Property Tax & Assessment Matters
At City Hall there are several new and
interesting items regarding property taxes.
Perhaps the biggest is the introduction of a
new Chief City Assessor - Mr. Stuart
Dalgleish. This may not be good for those
that wanted a basic change in the method of
preparing assessments. Indications are that
the current market value assessment is
here to stay. Industry observers are
watching for increased levels of
transparency in assessment reporting and
improved customer service.
Business Tax Harmonization is back.
Despite the cost to continue the existing two
gun approach (business and property taxes)
this proposal to combine the taxes was
dropped several years ago. The commercial
landlords saw that they would get stuck with
unpaid business taxes in cases of gross
leases and high vacancy. Promoters say
that the combined systems would be
cheaper to maintain and better cooperation
should result in solutions such as phasing in
the tax shift for properties affected by Gross
Leases.
Some issues are outstanding from 2007.
For instance, 2004 business tax appeals for
parking stalls in multifamily properties.
Indications are that the matter is winding
down as the City resolves some appeals
through the courts and others are settled
out through the negotiating efforts of Tax
Agents and the City. Until each case is
settled however, the 2004 assessment
remains a liability and should be accounted
for in the balance sheet.
The switch to an alternate form of assessing
industrial properties is another concern.
Actually it is the lack of transparency used
by the assessor when the main-stay of
valuing industrial properties, the income
approach, was abandoned in favour of the
Direct Sales Comparison Approach.
With all the sales of properties available to
the City Assessor in this hot market, it was a
logical (if not eloquently executed) idea of
switching to a property sales basis for
assessment. At the heart of the issue is the
willingness of the Assessor to disclose the
quality and type of adjustments made for
important property characteristics such as
Age, Condition, and Internal Finish. In the
absence of these adjustment factors the
over-site committee (MGB) cannot make
reasoned decisions.
Preliminary hearings to compel the
assessor to fully disclose the adjustment
factors used in their sales analysis are
scheduled and further direction is expected
in the spring of 2008. It is early yet to
determine if the same argument prevails for
the current year's industrial assessments.
Those of us other 15,000 commercial
property owners tend to consider
assessments acceptable when they are
both at the market value (as per a sale
price) and at the assessments of other
nearby similar properties. Tax payers often
forget that it was the Bramalea (BC)
decision, and in part those of RRAI in
Alberta, that set the standard of the owner
being entitled to the lower of these two
amounts.
For Calgary's approximately 400,000 home
owners we recommend checking the 2008
assessments using the free Home Owner's
analysis feature on Rickard's web page
www.propertytaxes.com.
In summary, there will continue to be
opportunities to serve concerned property
owners with our 25 year history of tax
review and appeal services for as long as
the market value assessment system and
this buoyant real estate market both remain. |
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