50% property tax increase for rental property

Leveraging, renting vs owning, making an investment or buying a home?
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George L
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50% property tax increase for rental property

Post by George L »

My cousin owns a rental property in Calgary and his property assessment has recently increased for more than 50%. The government’s explanation is that the revised rate is now based on property value rather than rental income. He heard that there is tax advisory companies which would fight this kind of cases on behave of the owner and they will charge an upfront fee plus 50% contingency every year there after. I guess the 50% contingency means the tax saving due to their effort.

Is this a common practice?
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Peculiar_Investor
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Re: 50% property tax increase for rental property

Post by Peculiar_Investor »

From the horse's mouth -- The City of Calgary - Property assessment. Has there been a change in use of the property? For as long as we've lived in Calgary our property assessment has been based on market value assessment. The link indicates that income approach is used for multi-residential property. Reading between the lines from your post it would seem that the city has determined a change in use and therefore change in assessment method.

Cannot comment on the tax advisory company questions, but I'd be leary of paying anyone a fee, particularly a multi-year fee.
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George L
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Re: 50% property tax increase for rental property

Post by George L »

Thank you for your info Mr Pi. The property is a 4 plex. In their reply to my cousin’s enquiry the ABU (Assessment Business Unit) told him that if the land value were greater than the income value they would assess the property based on the land value. But they didn’t explain in detail how the new assessment was calculated.
flywaysuzy
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Re: 50% property tax increase for rental property

Post by flywaysuzy »

So do people owning properties located in the flood zones get a massive reduction in their property taxes?
suzy
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parvus
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Re: 50% property tax increase for rental property

Post by parvus »

Wouldn't they incur more use of services?
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patriot1
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Re: 50% property tax increase for rental property

Post by patriot1 »

flywaysuzy wrote:So do people owning properties located in the flood zones get a massive reduction in their property taxes?
Well have property values in the flood zones seen a massive decline? A quick look at MLS suggests they haven't. For example:

http://beta.realtor.ca/propertyDetails. ... d=13965736

http://beta.realtor.ca/propertyDetails. ... d=14037047

Appears that the market is being rational given the provincial government has been covering flood losses.
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Re: 50% property tax increase for rental property

Post by flywaysuzy »

I can see people wanting to move out of a flood zone, but who would buy there? Optimists or ostriches, maybe?
suzy
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