PREPARING A PROPERTY TAX BYLAW

Property tax is a main source of revenue for financing municipal operations. Property tax rates can be established once council adopts the annual operating and capital budgets and the annual assessment roll is prepared. Most municipal councils will pass their property tax bylaws in April or May. There are four assessment classes: residential; non-residential (i.e. commercial, industrial, and linear); farm land; and machinery and equipment. Council may vary the municipal tax rates for each of the four assessment classes, but the rate for the machinery and equipment class must equal the rate for the non-residential class. The Municipal Government Act (MGA) does provide for sub-classes for residential, but does not provide for the splitting of tax rates within the non-residential assessment class (other than for vacant and improved property). The tax rates are set annually. A property tax rate is calculated by dividing the tax levy required by the corresponding property assessment class or subclass, or if desired, the total tax levy required by the total property assessment. For example, if a municipality needs to raise a total levy of $200,000 from non-residential propertie