June 30 has come and gone and along with it the deadline for paying our property taxes in Calgary (if you are not on the TIPPS program). Most of us know that our taxes are based on the value of our property as of the previous year. Take a moment and think ahead to, June 30, 2007. The amount of that tax bill will be based on the value of your condo now. We all know what has happened to property values in Calgary over the past 12 months. If the average price of property has increased 40% it stands to reason that your tax bill will go up 40%, as well. This doesn’t take into account the planned increase the city has already budgeted for.
Does the Fair Market Value method of taxation calculation put an unfair burden on condominiums, especially inner city condos? The values of inner city condos have seen phenomenal increases over the past 24 months, due in large part to their proximity to the city core. Have these properties put any additional strain on the city budget? Do they require or need new roads to be built, new utility services installed, new schools built, additional transit and garbage pick up planned, or even shopping centres to be developed as is the case in numerous subdivisions being constructed around the city? The obvious answer is no. The inner city condos already have infrastructure in place to accommodate the residents in them. It seems inequitable then that the tax collected from them is being used to subsidize further urban sprawl.
Our city is grappling with the growing pains of a successful economy (road congestion, children being bused long distances to school, longer commutes to work, etc). What if City Hall were to turn the question around. Instead of focusing on better ways to move people into the suburbs, why not find a way to get more people closer to the core, where they obviously want to be!
If you want to people to pay attention, make it financially attractive to them. One suggestion is to offer a reduction or subsidy on condominium property taxes if the condo is located within a certain distance from the city centre. This would encourage people to look at property ownership closer in nd would help alleviate the strain on the city of providing additional infrastructure in outlying communities.
This may seem a controversial option now. 12 months from now, when a 900 SF 2 bedroom condo in the Beltline is saddled with a $4000/year property tax bill, this option may gain a great deal of support!