Each year, City Council approves the budget needed to support city services. Municipal property taxes are a main source of revenue that municipalities use to pay for those services.
To determine the amount of revenue required from property taxes, the city takes the overall expenses and subtracts all other sources of revenue such as licence fees, permits, user fees and provincial grants. The amount that’s left is what needs to be raised through municipal property taxes.
The municipal tax rate
To help make sure each property owner contributes a fair and equitable share, the city sets a municipal tax rate each year. To calculate this, the city uses the total amount needed in municipal property taxes and the total assessment value of all properties in Leduc.
Here’s how the math works: Amount needed in municipal property taxes ÷ assessment value of all properties in Leduc x 1,000 = municipal tax rate
Let’s say the city needs to raise $30 million in municipal property taxes in order to provide all the services that have been approved in the annual budget, and the total assessment value of all the properties in Leduc is $4 billion. Using the math above, we know: $30 million ÷ $4 billion x 1,000 = 7.500. Therefore, 7.500 is the municipal tax rate that will be used to help calculate what each property owner is required to contribute in property tax.
This means that the if the amount needed to be raised in municipal property taxes changes, or the total assessment value of all properties in Leduc goes up or down, the municipal tax rate will also change.
Understanding your property tax bill
Your property tax bill also includes two levies that are collected on behalf of the province as part of the property tax process: Provincial Education Taxes and the Leduc Housing Foundation.
Provincial education taxes
The City of Leduc collects levies on behalf of the provincial government for education. Provincial legislation requires that education receive funding through property taxes and all property owners are required to contribute, whether or not they have children attending school. Approximately 25% of your property tax bill (or 25 cents of every dollar) goes to education taxes.
Your tax bill indicates whether the education portion of your taxes is directed to the public or separate school system. If your affiliation is incorrect, complete the Individual School Support Declaration or the Corporate School Support Declaration and submit it to us by Dec. 31 in order for the change to take effect for the next tax year.
More information about education property taxes can be found on the Alberta Education website.
Leduc Housing Foundation
Tax levies are collected on behalf of the Leduc Housing Foundation, which provides a variety of senior housing options, including supporting living, affordable housing and apartments for seniors. Approximately 0.26% of your property tax bill goes to the Leduc Housing Foundation.
Tax notice breakdown
Learn more about your property tax notice by viewing the city’s tax notice breakdowns: