Banff commercial property assessments have seen a big jump for the second year in a row, signaling a strong local tourism-based economy.
Commercial property values are up 21 per cent for 2015, while Banff’s residential values are up 2.9 per cent.
Chris Hughes, the Town of Banff’s senior accountant, said commercial assessments have been on an upward trend since 2013, and this year’s 21 per cent increase brings the total commercial assessment close to where it was in 2008.
“Certainly, the strong economy plays a big role in the rebound of the commercial assessments as we use an income-based approach for assessment of these properties,” Hughes said.
Residential assessments have remained relatively stable over the same period.
The total value of all property assessments in 2008 was $2.3 billion, and in 2015 they are back up to $2.243 billion. In 2012, Banff’s total assessment dropped to $1.8 billion.
Hotel assessments are based on a weighted average of net income – 20 per cent from 2011, 30 per cent from 2012 and 50 per cent from 2013.
Hotels make up 60 per cent of Banff’s commercial tax base. Resort hotels – there’s only one, Fairmont Banff Springs – makes up 60 per cent of the total hotel tax base, and 30 per cent of the total commercial tax base.
Hughes said the important message for businesses and residents is that the operating budget determines the overall tax increase – 4.52 per cent – not changes in assessed property values.
“The assessment and mill rate split will then determine how the overall tax revenues are allocated to each property,” he said. “Each individual property’s share of the tax burden may be affected by their increase or decrease relative to the average property assessment increase in their sector.”
It has been council’s practice in the past to adjust the mill rate split in a way to equally share any percentage increase in taxes between the residential and commercial sectors.
Hughes said he estimates this will result in a 2015 mill rate split somewhere between 4:1 and 4.5:1, down from 4.96:1 in 2014.
“The actual split will depend on a number of variables including the effect of any successful assessment appeals or changes to our assumptions on the Alberta School Tax Levy,” he said.
