Properties in Alberta are classified as either residential, non-residential, farmland, linear, or machinery & equipment. Some properties may have more than one class. When reviewing your assessment, you should check the classification of your property to ensure that it is properly described.
Residential properties are assessed at market value, as of July 1st of the year preceding the assessment notice and taxation notice. Market value is determined by analyzing the sales of all property types throughout the County. Mass appraisal techniques are used in this valuation process. Since assessment reflects mid-range sale values, the assessment may be slightly higher or lower than an actual sale price on a particular property. The Alberta Provincial Government regulates that the assessment ratio, the ratio of the assessment to an indicator of market value for a property, for all residential properties be 95 to 105 per cent for the median assessment ratio.
The Non-Residential category of property refers to industrial and commercial operations, such as industrial plants, gravel pit operations, service stations, meat processing facilities, stores, etc. Properties that have a multi-purpose use, such as a commercial business operating from a residential acreage, will have the commercial portion of the assessment classed as non-residential. Non-residential land, buildings and structures are assessed at market value as of July 1 of the year proceeding the tax year.
Linear properties include electric transmissions lines, telephone and telecommunications equipment, oil and gas wells, pipelines, towers, power generation and cable. Linear property is assessed by provincial assessors using regulated rates and depreciation schedules which apply specifically to this property. *Red Deer County collects these taxes on behalf of Alberta Municipal Affairs.
MACHINERY AND EQUIPMENT
Machinery and Equipment (M&E) that is used for processing or manufacturing is assessed at the stipulated regulatory level as per Minister's Guidelines (updated annually). This category includes properties such as gas plants, gas and oilfield installations, manufacturing facilities, etc.
Farmland is assessed on the ability of land to produce agricultural products. The Minister’s Guidelines in conjunction with the Alberta Farmland Assessment Manual has been utilized to prepare farmland assessments and these assessments are not based on market value. Farm buildings are exempt from assessment and taxation as long as those buildings are only being used for farming purposes.
Farm properties often contain several assessment classes. If the property contains a residence, then the residence along with the first 3.00 acres will be assessed at market value, as if it were a 3.00 acre subdivided parcel. These values are classified as residential on your notice. If there is a commercial or industrial/oilfield operation on the property, all buildings and improvements and the land area used for the operation will be assessed at market value and classified as Non-Residential. If there is Machinery and Equipment used in these operations, it will be classified as Machinery and Equipment. The remainder of acres will be assessed as farmland.
Guide to Property Assessment and Taxation in Alberta