If you are starting a business in Calgary, you are going to be either leasing a commercial space or, buying or building a place from which to conduct your business. Will you have to be paying taxes to the city of Calgary? The answer is yes.
If you are simply leasing a commercial space for you business, you will be obligated to pay a business tax which will be levied by the city. If you are buying or constructing a building for business purposes, you will not only be required to pay for a business tax, but will also be responsible for a property tax as well.
The business property taxes are used to pay for the services provided by the city. This includes police and fire services, water treatment, garbage and recycling, water treatment and parks and recreation just to name a few. Business property taxes also go toward helping the city maintain its infrastructure as well.
One good thing to know is that the city of Calgary has some of the lowest business property taxes found in municipalities across Canada.
Each year, the city reviews its projected expenditures that are required to maintain its services by determining the city’s budget. They first consider all projected revenues they will receive and then the shortfall which determines how property taxes will be levied for both residential home owners and commercial businesses.
The amount of property taxes that you will be required to pay if you own your place of business will vary from year to year.
How are property Taxes Calculated?
Non-residential property tax is paid by business owners of commercial properties which includes buildings, improvements made for the business (does not include improvements used for permanent living conditions), and also includes the land.
Business property taxes are based on the estimated market value of this property. Commercial land and buildings are assessed by the City of Calgary on an annual basis and applies to both occupied and unoccupied commercial space.
Some non-profit organizations such as business associations or trade associations may be exempt from business taxes, but they also responsible for the payment of non-residential property taxes. Exemptions are described in the Municipal Government Act.
The tax rate follows several basic formulas as follows:
The tax rate is calculated as follows:
required revenue ÷ total business assessment = business tax rate
Individual business taxes are calculated as follows:
assessed value of business premises x business tax rate = business tax levy
When Do you Pay Property Taxes?
Property taxes are generally due to be paid by or before the end of June each calendar year. You have 2 options when paying your property taxes. You can either pay the taxes in one lump sum when they have been accessed, or you can choose to pay them in monthly instalments through the Tax Instalment Payment Plan (TIPP).
What if you Disagree with your Property Tax Assessment?
You may appeal your property tax assessment with the City of Calgary if you think they are too high. These appeals must follow a certain format and must occur within a certain time frame after the assessment had been made.
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