Hope you didn't pay for that whole seat, cause you're only gonna need the edge — today we're answering the question: What is a supplementary assessment?
I'll give you a moment to collect yourself.
So, supplementary assessment — to boil it down, if you own property that was under construction and that construction was finished during this year, and because of that, the value of your property went up, you get a "supplementary assessment."
Why? Because the value of your property went up, but you are still paying property taxes on the old, unfinished value.
If you remember the assessment notice you got way back in January — The one that stated the value of your property as of July 1st of the previous year?
Well, now you're living in a brand new home, but you've got an old assessment value, which means you're not paying your fair share of property taxes for the year. A supplementary assessment is how the city addresses this discrepancy.
Let’s compare this fine old Edmonton house to a house still under construction to get to the bottom of this whole thing.
Example one, a finished house: You own a finished home that was valued at $400,000 as of July 1st of the previous year. Therefore, you’re gonna pay around $3,000 in property taxes for the current calendar year.
Example two, an unfinished house: You own a partially completed home
that was valued at $200,000 on July 1st of the previous year. Therefore, you would pay around $1,500 in property taxes for the current calendar year.
But, the go-getter that you are, let’s say you finish construction on your previously unfinished house and move in in September of the current year.
Congrats, you brought its total value up to $400,000 with four months left in the year. Which illustrates the problem that supplementary assessments solve.
Are you going to pay the property taxes on a $200,000 house even though you’re living in a $400,000 house for the latter part of the year? No, that’s not chipping in a fair share, which is the whole point of property taxes. But, on the flip side, are you supposed to pay for a full year’s worth of taxes on a $400,000 house, even though you’ll only have one for the last four months this year. No, that would also be unfair.
In the name of fairness, after completing your awesome new house, you receive a supplementary assessment, and pay property taxes of $500 to pay for just four months of property taxes on the additional $200,000 in value you added to your house. Four months of new house, four months of new property taxes. Math makes sense.
And that’s what a supplementary assessment is for.
Basically, to sum it all up, to get down to brass tacks, to put a bow on it — if you’re a property owner, and you finish new construction during the current year, you will get “a supplementary assessment” in order to make sure the share of taxes you’re paying for the year is fair.
For more information about property assessment in Edmonton, visit http://edmonton.ca/assessment.