|When hoteliers receive their annual
assessment notice for property taxes they often ask, is
this the proper assessment? For most people in Canada
the issue ends there. You can’t fight city hall,
In Alberta however, there are rigorous property tax
agents who keep the assessments fair and equitable.
Alberta hoteliers therefore have a better than average
chance of having their assessment question answered.
Tax agents can provide this service, usually on a contingency
basis (ie: payment from tax savings only).
they look for are inconsistencies in the assessment.
Spotting inequities involves an analysis of the assessor’s
calculations and a comparison with the operating statements
of the hotel. Some items are not intended to attract
a property tax and should be eliminated from the business
profit of the hotel. Adjustments are required for, among
other things, furniture fixtures and equipment. RevPar
must reflect the industry average and may be increased
or decreased by the assessor to reflect the municipality’s
opinion of the property’s management.
Since these adjustments tend to be influenced by the
assessor’s opinions, a comparison with the assessments
of other similar properties is a valuable tool in the
tax agent’s kit. At the end of the day however,
the lodging industry should never be assessed at the
amount of the market value of the property! The percentage
of value that is correct ranges from 95% down to 70%
for larger properties. In light of the shifting fortunes
of the accommodation industry, there may be a greater
efficiency and appropriate tax savings in a finely tuned
assessment. A professional tax agent helps you create
tax strategies that increase your property value.