Property tax hikes mean 'difficult decisions' for Calgary businesses, Chamber of Commerce warns
'They're being hit from all sides,' says Adam Legge
The head of the Calgary Chamber of Commerce says looming property tax hikes for businesses could be too much of a burden for companies that are already struggling.
On Thursday, the city released its update on property value assessments, which are used to determine property tax bills.
- Calgary home values drop 4% while non-residential properties decline 6% in 2017 assessment
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Overall, non-residential property values went down about six per cent. But more than 70 per cent of businesses and business property owners will see higher property taxes this year, and several thousand face hikes of more than 30 per cent from last year's tax bill.
That's because of the way the city calculates tax liabilities.
'Revenue neutral' formula
Under the city's "revenue neutral" formula, a tax bill depends on how much a property value changed relative to the overall six per cent change across the city.
While property values in the office category were down by 16 per cent — driven by growing vacancy rates in the core — retail properties saw a slight increase in total value. Industrial properties were roughly flat.
As a result, many business owners outside of downtown will face big hikes in their non-residential tax bills this year, because of their relative position to the overall assessment.
On the other hand, many companies in those emptied-out downtown office buildings will pay a lot less in property tax.
'You're just paying out more and more'
Calgary Chamber of Commerce president Adam Legge says the timing is terrible.
"It's cumulative for many businesses. Increased minimum wage, carbon levy, you name it. They're being hit from all sides and in an environment where you've got probably in many instances lower revenues," he said.
"You're just paying out more and more, which means there are fewer abilities to create new jobs."
Legge says some larger companies could be on the hook for an additional $100,000 or more.
"And not many companies have the ability to dig deep and pull that out of thin air. So it means making difficult decisions like: 'do I have to lay someone off to be able to make my tax obligations?'" he said.
In November, city council earmarked $15 million to help struggling businesses, but it's not yet clear how that money will be administered.
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