Town Finances FAQs
How is the Town Budget set?
The Town budget is set annually by Council. Town Administration presents the budget to Council in the fall, which includes all programs and services provided to the residents of Bruderheim. The municipal budget consists of an operating budget and a capital budget and includes recommended funding sources. The final interim operating budget is passed by Town Council in May of each year.
- The operating budget provides for ongoing services that residents enjoy every day, such as snow clearing, grass cutting, and road maintenance
- The capital budget provides for the replacement of essential infrastructure and equipment necessary for the support of municipal services
How does the Town track financial statements?
Municipalities are audited annually by an independent auditor. The audited financial statements for the previous year are presented to Council in the spring, typically in April. During the year, the Finance team provides Council with quarterly financial updates.
What is Asset Management?
All municipalities are required to record and report capital assets, including their condition, in their financial statements. This helps the Town provide better asset management.
What is Tax Free for Three?
Tax Free for Three is a tax incentive policy that Bruderheim created to encourage developers and families to invest in the Town. The policy will provide an opportunity to build new houses, commercial businesses, and industrial facilities without having to make Municipal Property Tax payments for the first three years on improvements. Land, school and Seniors Foundation taxes will still be collected.
It is the Town Administration's mandate to provide quality of life to the residents of Bruderheim. People often ask what this means and "what do we get for our taxes"? It is good for residents to understand that not a day goes by without receiving value for your tax dollars. A comprehensive list is found below, but here are a few examples:
Every day you:
- Have access to roads that have had repairs
- Are protected from fire
- Have police to protect your property
- Can utilize the walking trail system
- Enjoy the cut grass and weed control
- Can access family programs and attend community events
- Have snow cleared when required
- Have Bylaws enforced
- Can go skating on the outdoor rink
- Can watch your kids play on a soccer field, baseball diamond, or in the hockey arena
- Can access seniors programs
These are just a few examples of your tax dollars at work for you every day in Bruderheim!
How are my taxes calculated?
The Budget process develops the cost of all services provided to the residents of Bruderheim. Your Town Council reviews all services and directs administration as to the levels of service that are adequate to ensure that residents are well served.
The costs of the services residents want and enjoy determine the taxes required!
The total tax dollars required are then divided by the total property values in Bruderheim to determine the 'tax rate'. This rate is applied to all assessed values to determine taxes payable. The main increase in taxes is typically due to inflation on the services provided. Alberta municipalities have seen double digit inflation over the last 5 years, making it challenging to provide services at a low cost.
Example: Assessed Value ($300,000) x Tax Rate (8.58) = Taxes Payable ($2,754.00)
What is market value assessment?
Market value is the amount that a property might be expected to realize if sold on the open market by a willing seller to a willing buyer. The Alberta Government requires all Alberta municipalities to update property values annually to reflect the market value. This assessment notice gives you the market value assessment of your property.
Assessment - how does it work?
Assessment (market value) of your home determines taxes payable. Your taxes payable is dependent on how your home compares to the 'average' home in Bruderheim (e.g., $300,000). If your house value is higher than the average, you pay more tax. If the value is less than the average, you pay less tax.
One misconception about taxes is the belief that when a home's market value goes down, taxes will go down. They do not for 2 reasons:
- The revenue required to provide the mandated services does not decrease.
- The "average" home price has decreased also, making the change relative for all residents.
The 'comparison to average' calculation method ensures that taxes stay consistent and reasonable each year and maintains fairness among taxpayer
There are two dates used by the assessor throughout the assessment process:
- Valuation date - the 1st of July of the previous year (for example, for taxation in 2017, the valuation date is July 1st, 2016).
- Condition date - the 31st of December of the previous year (for example, for taxation in 2017, the physical characteristics of the property are recorded as of December 31st, 2016).
My assessment has changed from last year. Will my property taxes change?
Your property taxes will decrease only if your property's value dropped more than the average decrease municipal-wide and the drop is low enough to offset any Council budget increase and/or a change in the provincial education tax.
How does the change in my assessment affect my property taxes?
How your property assessment changed from the previous year compared to the average assessment change of all residential properties in the municipality in the share you'll pay of the municipality's property tax requirement determines the change.
What if I don't agree with my property tax assessment?
Before filing a complaint about your tax assessment, it is recommended that you contact an assessor to discuss your assessment. The assessor can provide you with information on how your assessment was prepared and help you to determine whether your assessment is correct and equitable in relation to similar properties. For more information, see the Tax Appeals section.
Only a portion of your tax bill goes to the municipality (approximately 74%). There are three tax rates on your tax bill:
- Municipal Operating (74%) - Used to generate the revenue required to pay for the many valued services provided to residents.
- Education Requisition (23%) - Used to generate the revenue required by the Province to run schools in the region.
- Lamont Seniors (3%) - Used to generate the revenue required to support the Lamont Seniors Foundation to subsidize seniors lodging.
Residents are taxed by three different levels of government - Federal, Provincial and Municipal. While Federal and Provincial governments have many sources of taxation, such as Income Tax, GST, Oil Royalties, and Liquor and Tobacco Taxes, municipalities have only property taxes to generate revenue. Only 5% of all government-generated taxes go to municipalities, yet municipalities provide the most direct services to residents everyday! Road maintenance, snow clearing, grass cutting, and fire services are a few of the key services provided.
Approximate Taxes Paid Per Household:
Municipalities get the least amount of the tax revenue pie, yet they provide the services that are used by people everyday!
Under the Municipal Government Act, municipalities are required to levy a penalty for late tax payments. Ours is 18%, which is typical for municipalities. Many of the services provided by Bruderheim are legislated by the Province, meaning that we have no choice but to provide the services. If tax revenues are not received in a timely fashion, our municipality's ability to pay for essential services, such as fire response and snow clearing, is at risk.
Over 90% of Bruderheim residents have historically paid their taxes on time. Unfortunately, those residents' tax dollars go towards subsidizing the 10% of the taxes that are unpaid. Thus, a high penalty is levied to ensure prompt payment and lower the burden on residents who have paid on time. This also ensures that the municipality will have the financial resources - on time - to provide the services required and enjoyed by residents.
The Town actively works towards collecting unpaid taxes. Unfortunately, a municipality must levy high penalties or risk the investment in services by the vast majority of residents, and ultimately, the Town's financial sustainability.
Provincial legislation specifies that the funds for schools are to be collected by municipalities. The province and separate school boards requisition revenue they require from the Town and the total levy is distributed among taxpayers through their property tax bills based on School Support Declaration. People who do not own property contribute indirectly through their rental or lease payments.
Requests for tax certificates are required in writing via fax to 780-796-3037 for a fee. A photocopy of the cheque for the fees must be included with the request in order for Administration to process your request. A copy of the requested tax certificate will be faxed back to you within 3 business days, and the original will be mailed on the day it is completed.
Tax certificates will provide the roll number, owners, legal description, civic address, levy, current balance, arrears, and utility account balance. It is highly recommended to request a tax certificate when purchasing a property.