Owners of hundreds of parcels of land in the County of St. Paul will receive assessment letters this month to confirm if their property currently assessed as agricultural for taxation purposes is in fact being used for agriculture. This move has the potential to see many acres of land reassessed as recreational land based on market value meaning increased property taxes for owners.
County CAO Sheila Kitz informed council members at last Tuesday's meeting that she fully expects this to be a contentious undertaking and they should expect some phone calls from ratepayers.
In total, the owners of 689 properties in the county will receive the letters along with a survey they will be required to complete regarding the land's use. Accurate Assessment Group, the county's contracted assessment company, will review the information provided and a determination will be made for assessment which may require a re-inspection of the property in question.
"This is just to give you guys a heads up because this is going to be contentious," Kitz told council, noting the number of parcels involved is "staggering."
Council had little to say in response, although Coun. Laurent Amyotte questioned if it was possible councillors could receive a list of who was involved.
Reeve Steve Upham told the Journal the move is not a tax grab on the part of the county but rather comes from the province. Land that is being used for recreational purposes as opposed to agricultural must be assessed at true market value, Upham said.
"The province has adjusted so much of what we do. They've adjusted linear, mechanical assessment so we lost money there. It think this was a way to true up some of these other properties . . . Some of these properties have taxes of like $120. A lot of them are less than $100 because they're taxed based on their agricultural value not on their real property value. So the province threw us that bone and said you know what we're taking this stuff but here chew away at this."
For the most part, Upham believes the properties in question are generally small in size.
"They are all basically bush, unimproved land and a lot of them are small parcels that are corners and triangles along highways that have no reason to be agriculturally used, no ability to be agriculturally used."
On the downside, Upham admits the potential exits for a drop in the value of the land in question if it is reassessed from agricultural to recreational.
"At the end of the day, if they're paying $2,000 or $1,800 a year for a piece of land they go cross-country skiing on three or four times a year in the winter or like to go and observe birds in the summertime, they are going to sell that property I think. So, I think it has the potential to drive those property values down, that's just a personal observation for me."
CAO Sheila Kitz explained to the Journal that when the county contracted Accurate Assessment Group to take over the assessment services for the municipality about five years ago, the problem of how some parcels were being assessed was first identified. No change was made at that time.
"Council determined that it was not fair to make a change to landowners in one-fifth of the County while other parcels would not be inspected for quite some time," Kitz said, pointing out that the assessors move through the county to inspect about 20 per cent of the properties each year. "Now five years later, the assessors have reviewed all parcels in the County and have determined that there are 689 parcels of land where it is not clear if the land is being used for farming operations."
"Under the Alberta Regulation “Matters Relating to Assessment and Taxation Regulation 220/2004”, the valuation standard for a parcel of land is market value, or if the parcel is used for farming operations, agricultural use value. There is a big difference in the assessment value in these cases," Kitz stated.
Based on the landowner's response to the survey, Kitz said the assessment may change for the parcels in question, with the change being effective for the 2021 taxation year.