Last November, City of Calgary Council approved a $52 million property tax rebate for 2014. The rebate is a credit to the property, not a specific owner. That raises the question, who gets the rebate if the home changes hands during the year?
According to Lou Pesta, Real Estate Lawyer at Walsh LLP, the “Canadian Bar Association Real Property Section for South Alberta and the Law Society of Alberta Practice Advisor have recommended that the rebate be adjusted between the buyer and seller on a pro-rata basis according to the portion of the year that they have owned the home. Some lawyers, however, are bucking the trend and are looking to scoop the entire rebate for the seller.” Thanks again to Lou Pesta for keeping us abreast of new legal developments.
While the rebate isn’t large, I want to make sure my clients get their fair share when the property taxes are adjusted at closing, and so I’ll write the appropriate term in the Offer to Purchase.
Rebate Factor & Calculation
The factor used to calculate the rebate depends on the assessment class of the property: residential, non-residential, or farmland. For residential, the rebate factor is: 0.0002311
The rebate amount is calculated by multiplying the property’s assessed value by the relevant rebate factor.
Assessed Value x Rebate Factor = Property Tax Rebate
For example, if the property was assessed at $500,000
500,000 x 0.0002311 = $115.55
Like I mentioned, the rebate isn’t large (depending on the assessed value) but why throw money away? I help clients not spend any more than necessary during the home buying process.
If you’re interested in buying or selling a home, contact me at 403-554-2284 or send an email to: email@example.com