HUMBOLDT — Humboldt property owners could see a major shift in their tax bill depending on how their property values have changed in the 2021 revaluation.
Joe Day, the city manager, told Humboldt council at their May 25 meeting that in most years applying new taxes is a relatively straightforward matter that sees city staff adjust tax rates to generate the revenue needed.
“Unfortunately, this year, there's a lot more that's complicating the matters than those other three years.”
Every single property in the entire province has been revalued – and their new values are no means uniform.
In Humboldt, agricultural properties on average have seen a 49.5 per cent increase in their assessed value, commercial a 27.4 per cent increase, residential a 4.7 per cent decrease, apartments/condos a 7 per cent decrease and railway properties a 75 per cent increase.
In 2021, the city will receive the $7.2 million it collected in 2020 for its share plus an extra $136,000 – a 1.9 per cent overall increase.
Residential
The municipal portion of the tax levy coming from residential properties will increase 2.5 per cent. The levy from condominiums, which are charged the same as most residential properties, will increase 5.9 per cent. For apartments, which are charged differently, taxes will increase by 0.1 per cent, with city staff saying in a report to council that apartments saw a large increase in the 2017 revaluation.
Commercial
General commercial properties will see the municipal portion of the tax levy increase 3.6 per cent, while warehouse-workshops – a category created in 2018 to counter a dramatic property tax increase resulting from increased property values from the 2017 revaluation – will decrease 2.7 per cent.
Cities in Saskatchewan can determine tax rates based on broad categories of properties, but they cannot set tax rates on individual properties. This results in a problem when property values within a category vary wildly, resulting in a large tax increase for those properties that have seen above-average growth in their property values.
“What has effectively happened in Humboldt is that one group of our commercial in particular is moving up a fair bit in valuation compared to some of the other groups,” Day said.
A report to council said that there is one group of properties that they have identified that are going up by about 45 per cent in value, while another group is not going up at all. Day said while older properties are retaining the same value, it’s the newer retail and office buildings that are seeing the highest increases.
“We’re recommending to you, council, some mill rate factors to help stabilize those ones, to soften the blow to be quite honest, because we can't hold the line on them,” he said.
“There’s just too much of an increase for us to be able to find other ways to distribute it, but we have lowered their mill rate factor on that group of properties to what we think is a palatable amount that we can present to you, so that their increases aren't as dramatic.”
In an email to the Humboldt Journal, Day said the city can’t separate the group of commercial properties with higher than average revaluations into a different category like they did with the warehouse-workshops in 2018 because they have been unable to find any distinction of these properties that would objectively differentiate those from the remaining properties.
Agricultural
For agricultural properties, the municipal portion of the tax levy will increase 29.9 per cent.
“This is a very small group of properties that have normally had their tax rates matched to (or close to) the residential tax rate,” a report to council said. “The relative stability of the residential assessments along with a dramatic increase in assessed values for agricultural properties is resulting in a high percentage increase, however given the low 2020 rates the increase relates to approximately $250 per property.”
School taxes
Day told council that the school system will see a 9.4 per cent revenue increase from its share of property taxes
For general commercial, the revenue increase will be 54 per cent.
Michael Behiel, Humboldt’s mayor, said the 9.4 per cent increase is hard to see when the city has been making an effort to keep property taxes down while still expanding infrastructure.
“We need to make sure the citizens understand that we're not yanking the money because we're running short because we're trying to do more than we can afford to do. It's because of the 9.4 per cent that we have little control over.”
When combining school and municipal taxes together, the blended increase is 3.9 per cent overall. For general commercial, the blended tax increase is 16.5 per cent.
Concerns
Day said the city is planning to send property owners a combined assessment and tax notice before the end of June.
“When we send the notices out, we will be including an informational sheet to provide guidance to taxpayers on how to have their questions and concerns addressed.”
How municipal taxes are calculated in Humboldt
- The Saskatchewan Assessment Management Agency determines the value of your property.
- The province determines the percentage of the assessed value that is taxable. This year, it’s 55 per cent for agricultural properties, 80 per cent for residential, 85 per cent for industrial and 85 per cent for resource properties.
- The city determines a uniform mill rate – the amount of tax payable per dollar of the taxable assessed value of a property. 1 mill is equal to $1 in tax for every $1,000 of a property’s assessed value. Humboldt’s mill rate this year is 8.755 mills.
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The city then applies a mill rate factor, a multiplier, for each category of property.
• Agricultural: 0.7
• Residential and Condos: 0.828.
• Apartments: 1.550
• Commercial and Industrial (General): 1.50
• Motels/Hotels and Malls: 1.50
• Warehouse-Workshops: 1.70
• Railway: 1.70
For example, if the uniform mill rate results in $1,000 in taxes, if it’s an agricultural property, it’s multiplied by 0.7 to result in $700. - A general base tax, a flat rate of $500, is added.
- An infrastructure base tax is added. For residential properties with improvements, the cost is $135. For commercial, railway and commercial workshop properties, the cost can range from $135 to $3,375 depending on the value of the property.
- A road rehabilitation tax is added. For residential properties with improvements, the cost is $70. For commercial, railway and commercial workshop properties, the cost can range from $70 to $1,750 depending on the value of the property.
- Downtown businesses have to pay a Business Improvement District levy of $135 plus 0.35 mills.
