Finance and Taxes FAQs

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Taxes FAQs

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What is Tax Free for Three?

How are my taxes calculated?

What is market value assessment?

Assessment - how does it work?

My assessment has changed from last year. Will my property taxes change?

How does the change in my assessment affect my property taxes?

What if I don't agree with my property tax assessment?

Why do I pay for school taxes when I don't have children going to school?

How do I order a tax certificate?

What information does the tax certificate include?

What is the Tax Installment Payment Plan (TIPP)?

What's the advantage of TIPP?

Who can join TIPP?

How does TIPP work?

How do I apply for TIPP?

 

 

 

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.

 

What do I get for my taxes?

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.

Assessed Value x Tax Rate = Taxes Payable

 

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:

  1. The revenue required to provide the mandated services does not decrease.
  2. 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:

  1. Valuation date - the 1st of July of the previous year (for example, for taxation in 2017, the valuation date is July 1st, 2016).
  2. 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.

 

What percentage of my taxes goes to the Town?

Only a portion of your tax bill goes to the municipality (approximately 74%). There are three tax rates on your tax bill:

  1. Municipal Operating (74%) - Used to generate the revenue required to pay for the many valued services provided to residents.
  2. Education Requisition (23%) - Used to generate the revenue required by the Province to run schools in the region.
  3. Lamont Seniors (3%) - Used to generate the revenue required to support the Lamont Seniors Foundation to subsidize seniors lodging.

 

What are total household taxes?

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:

Federal      65%

Provincial  35%

Municipal   5%

Municipalities get the least amount of the tax revenue pie, yet they provide the services that are used by people everyday!

 

What are tax penalties?

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.

 

Why do I pay for school taxes when I don't have children going to school?

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.

 

How do I order a tax certificate?

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.

 

What information does the tax certificate include?

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.

 

What is the Tax Installment Payment Plan (TIPP)?

TIPP is a tax installment payment plan by which taxpayers in the Town of Bruderheim may pay their property tax in monthly installments instead of a single payment.

 

What's the advantage of TIPP?

Many people find it difficult to make a single large payment that comes due once a year. Monthly installments break your property tax into smaller amounts which may make it easier to budget.

 

Who can join TIPP?

You can join TIPP if

  • your tax account is paid in full
  • you have chequing privileges at a financial institution (bank, trust company, treasury branch or credit union)
  • you do not currently pay your taxes through a mortgage company (P.I.T.)
  • your application is received at least two weeks before the start of the next calendar year (December 15)

 

How does TIPP work?

Your current tax levy will be divided by 12 to establish your monthly payments for January 1 to May 1.

I/We acknowledge there may be a difference between the amount paid by installments and the actual tax levy and that adjustment may be necessary.  The monthly installment amount for the period of January 1st until the date of the Tax Notice being mailed is calculated by dividing the previous year’s tax levy by the remaining months in the calendar year.  The monthly installment amount after the Tax Notice has been mailed will be calculated by the actual current year’s tax levy, subtracting the prior monthly installments that have been received to date (if any), and dividing by the remaining months in the calendar year. Your monthly payment will be adjusted June 1 to compensate for changes in taxes resulting from the annual tax levy. Your annual tax bill, usually issued in May, will show the total amount of installments to date and the calculation of the installment payments for the remaining payments in that year.

Payments begin January 1 of the new year and continue each consecutive month.

Payments may only be made by automatic withdrawal from an account with chequing privileges at a financial institution. All debits are processed for the first banking day of each month. You must give written permission before the withdrawals will begin. The Town of Bruderheim does not charge for this service; however bank service charges may apply.

 

How do I apply for TIPP?

Complete and sign the application form found on our Forms Page and send it along with a sample cheque marked “VOID”.

By mail to:                                                                                                   

Town of Bruderheim                                                                        

Box 280

Bruderheim AB T0B 0S0

By fax to: 780-796-3037 

By email to: sharron.sinclair@bruderheim.ca

 

 

 

Town Finances FAQs

 

How is the Town Budget set?

How does the Town track financial statements?

What is Asset Management?

 

 

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.