Assessment

The Municipal Government Act (MGA) legislates and requires that all property in Alberta be assessed each year. Annual assessments ensure that changes in the market place are captured annually, protecting tax payers from large market fluctuations over time.  Property assessments are used to distribute taxes in a fair and equitable way.  This means that owners of property with similar market values will pay similar amounts of property taxes.

An Assessor visits your property to accurately determine the physical characteristics, condition and use of the property. They will determine if buildings are present on the property and their use. The Assessor will also determine how the parcel is to be assessed, if all or part of the parcel is being used for farm, a farm residence, or other uses on the property or within buildings. The Municipal Government Act provides assessors with the authority to enter the property and examine records in accordance with their duties.

For assessment purposes, properties are divided into four general classes:

• Residential (vacant or improved houses, cottages, acreages, and farm sites) which is assessed at market value.
• Non-residential (commercial or industrial businesses, including land and buildings) which is assessed at market value. Two sub-classes exist within the non-residential class:
  • Designated Industrial Property (wells, pipelines, power lines, cable distribution, and telecommunications) which is assessed at regulated values,
  • Small Business, which is assessed in the same manner as other non-residential property. Small business can be subject to a lower mill rate for property taxes if council sets a different amount for this class.
• Farmland (land used for farming operations as defined in the regulations) assessed at regulated values.
• Machinery and equipment DIP (oil and gas field facilities and plants, processing or manufacturing facilities) regulated by the Alberta Energy Regulator, the Alberta Utilities Commission, or the National Energy Board, are assessed at regulated rates.

'Market Value' is the price a property would likely yield if sold after adequate time and exposure on the open market by a willing seller to a willing buyer. The Assessor determines this figure by extensively analyzing sales transactions for similar property types for a twelve-month period from July 1 to June 30 to determine market trends and patterns, and then uses mass appraisal techniques to finalize market values to be used for the subsequent taxation year. For example: your 2025 property assessment notice is based on mid-range values as of July 1, 2024, real estate market conditions and reflects the physical condition as of December 31, 2024.

Properties not assessed on a market value standard include farmland, railway, machinery and equipment, and designated industrial property. These are assessed at prescribed regulated rates and standards mandated by the Minister of Alberta Municipal Affairs, using the Minister's Guidelines for Regulated Property.

Lands that have previously been assessed and classed as farmland are lands that are exclusively used for farming operations and have historically been treated and taxed as such. If the use of the parcel of land continues in a farming operation, the property will continue to be assessed as farmland. If your land has not been assessed as farmland and you start up a farming operation, you may qualify for farmland status in the following tax year. To determine if you qualify, contact Compass Assessment at (780) 469-5552 or info@compassac.ca 

All farmland sales are investigated thoroughly, identifying buyer and seller, analysis of arms length transactions, market value property analysis, use of existing farm practices by the seller, and future use of property by the buyer. The assessor will determine whether a piece of property can continue to be assessed as farmland.

Your property can qualify for farm status in the following tax year if you let your assessor know your status has changed for farm classification and meet the legislated requirements.

If a parcel of land is not farmed, it will be assessed at market value. This will result in an increase in property taxes. 

The objective of a farm property inspection is to ensure that the proper assessment classification is placed on the property. If the assessor determines that your property may classify for farmland status, you may be contacted for more information.

Yes, to qualify as a farming operation, there must be a sale of agricultural products that were raised on, or produced from, the applicable parcel of land. Sales receipts and evidence of farm income will help to determine your eligibility.

Your property will be inspected for farm activity, and you will be required to provide a historical sales log, or other proof of farm sales, from the parcel of land. Otherwise, the parcel of land will be assessed based on market value.

Ask yourself if the assessment reflects a mid-range value as of July 1 of the previous year. Would you have considered selling your property then, for the assessed value? If the answer is ‘yes’, or ‘maybe’, then the assessment is probably reasonable. If the answer is ‘definitely no’, and you are not a farmer with exemptions, or are a farmer with exemptions and need to know more, then you should speak to the Assessor.