The province is set to freeze the education portion of the municipal property tax for three years, providing some relief to cities like Calgary, which have seen massive increases in recent years.

Premier Danielle Smith, Finance Minister Jason Nixon, and Municipal Affairs Minister Dan Williams joined Calgary Mayor Jeromy Farkas at city hall on Oct. 30 for the announcement.

A new, standardized education property tax will be set at $2.65 per $1,000 of assessed value on homes and farmland, and $3.975 per $1,000 of assessed value on non-residential properties.

According to the City of Calgary’s property tax calculations webpage, Calgarians currently pay $2.7593 on every $1,000 of assessed value for residential. Non-residential pays $4.15 per $1,000.  On a $700,000 home, it will save taxpayers about $70 per year.

The new values will stay intact for three years, at which time the province will review rates for the next three-year cycle.

“Albertans expect the Alberta government to be clear about the tax that it collects, and disciplined in how we spend those dollars,” said Alberta Finance Minister Jason Nixon.

“And while we work hard to make every tax dollar count, the current education property tax calculation does not always meet that clarity test.”

Nixon said that this new system will save municipalities an estimated $100 million combined in 2027/28. For those cities where the new standardized rate is more than the

Premier Smith said that her government is committed to making life more affordable for Albertans.

“As we all know, Mayor Jeromy Farkas has advocated very, very, very, very, very strongly on this issue, and today’s announcement reinforces that our UCP government is committed to making life more affordable for Albertans and Calgarians, and ensuring that our province remains the best place to live and work and raise a family for generations to come,” she said.

Biggest provincial property tax hike in history

Mayor Farkas criticized the provincial government in the past for delivering a massive increase in education property tax – to the tune of $350 annually for a typical Calgary household.

On Friday, he gushed over the province’s willingness to come to the table on this issue.

“This is sincerely a generational leap in fairness and transparency for municipalities all across Alberta, and what you’re doing here is not just for the benefit of Calgarians, but every single Albertan,” Farkas said.

“So, action, I think, is the word of the day when it comes to your government, Premier.”

Mayor Farkas said that it was important to advocate for fairness from the province, and that a $600,000 house in Calgary should be taxed the same way as a similarly priced house in Edmonton, Chestermere or Rimbey. That provides municipalities certainty, he said.

“About 58 cents of every residential property tax dollar goes to the city in the city of Calgary, and the other 42 cents goes to the province,” Farkas said.

“We collect the whole bill, but we don’t control the whole bill, and having those provincial numbers before our budget debate makes a transformational, generational difference because we have some catching up to do.”

As with any potential freeze on property taxes, there’s a potential for a so-called ‘bow wave,’ or the need to catch up come 2030, when the new rate is reviewed. Minister Nixon said they would be watching that.

“If it is an issue, we’ll have a conversation to figure out how to manage it through it. And what I mean by that is, a natural assessment growth on property value may actually keep this exactly where we want to long term,” he said.

“Now we can’t figure that out till we run this process for a period of time. So, I think the message that we should take from the freeze is that we want the intention of what we’re trying to do is to keep this fair, keep it stable, keep it clear, and also at the same time make sure that we take an appropriate amount to be able to pay for the education system.”