With property tax notices being released throughout May, we thought we would cover some of the most frequently asked questions and points of confusion on property taxes and assessments as well as how they relate to your mortgage.
Property Assessment versus Property Tax Notice
Simply put, an assessment is determined by using information about your home (such as the size, style, and year it was built) combined with current market data to determine an estimated value for your home.
It is completed by a municipal assessor each year and is based on what your home was worth in July of the previous year. For example, the assessment you received in early 2019 would have been based on your home’s value in July of 2018. An assessment is similar, but is not considered the same as an appraisal on your property.
Your property tax amount is based on the assessed value of your property and is used towards municipal infrastructure to benefit the community you reside in. As a general rule, if your property value has increased on your assessment, your property tax amount is likely to follow suit.
If you are applying for a mortgage, your lender may request a copy of both your property assessment and your property tax notice. It’s important to note that property tax requirements may vary depending on the lender involved and your individual situation.
How Can I find my Property Tax or Assessment?
If you are unable to find the mailed copies of your assessment or tax notice, you can request them through the municipality in which you reside. Edmonton has an online portal you can sign up for to pull these on your own. Strathcona County also has a number of accounts you can sign up for to view your information.
Who pays my Property Tax?
When you get your mortgage, most lenders typically provide the option to add property taxes to your mortgage payments. This is a great option for anyone would prefer to have their lender take care of the payments on their behalf. The payments are held in an account and your lender will submit them when they are due. Remember that this may not automatically occur when you get your mortgage - your Broker should be able to help you request adding your payments to your mortgage.
Is there a payment plan available?
If you have opted to pay your property taxes on your own, a large number of municipalities (including both Edmonton and Strathcona County) offer a program called TIPP, which stands for Tax Installment Payment Plan. This allows you to set up a monthly plan as opposed to having to pay a lump sum.
Your property taxes are generally due on the last business day of June, so if you anticipate needing to use a monthly payment plan for the upcoming year you should aim to get it in place as early as you can. Penalties may be incurred if you are unable to pay in full on time even if you call to set up payment arrangements.
How much will my property tax be?
The City of Edmonton has a property tax estimator and assessment tool if you would like to get a general idea of how much you will owe. If you live in Strathcona County, they also have an estimator as well as an assessment tool for general informational purposes. Please note that these tools are estimates only and will not meet any requirements set forth by your mortgage lender.
Any questions about property tax or assessments? Leave us a comment below or contact our office!