Many homeowners take pride in enhancing their outdoor spaces, both for aesthetics and functionality. However, one important consideration is whether these improvements will lead to higher property taxes. The short answer? It depends.
How Is Property Tax Calculated in Canada?
Property taxes are regulated by local municipalities and are based on the assessed value of your home, which takes into account:
- The market value of the property
- The size and features of the home
- The location
- Recent improvements and upgrades
Each municipality has its own rules and reassessment schedules, typically every few years. Landscaping falls under the category of improvements and modernizations, which can influence property value and, in turn, property taxes. However, this only applies to major upgrades.
Smaller landscaping projects, such as:
- Planting grass
- Adding flower beds
- Installing shrubs
…generally do not impact the assessed value of your home.
On the other hand, larger additions such as:
- A swimming pool
- A fence
- A gazebo or patio
…are considered major upgrades and could lead to an increase in property taxes.
Do I Need to Report Major Improvements to the Tax Office?
Since municipalities conduct property assessments every few years, you might wonder: what happens if you make a major landscaping change before the next scheduled assessment? In Canada, homeowners are not required to self-report improvements to the tax office. However, there are a few things to keep in mind:
- Building permits – Many significant upgrades require a building permit. Once issued, the improvement is automatically recorded, and your tax assessment may be updated.
- Municipal reassessments – In addition to scheduled reassessments, some properties are randomly inspected.
- Property sales – When a home is bought or sold, it undergoes a new valuation, which accounts for all changes made since the last assessment.
How Can You Avoid an Unexpected Property Tax Increase?
If you’re planning a major landscaping project, here are a few steps to help you prepare:
- Check your local municipality’s regulations to understand which improvements could impact your property tax.
- Consult with real estate professionals to assess the potential effect of your upgrades on home value.
- Keep in mind that minor improvements rarely trigger a reassessment.
Landscaping alone doesn’t always result in a higher property tax bill. However, significant changes – like adding a swimming pool, deck, or other large structures – can increase the assessed value of your home, leading to higher taxes. Before making major improvements, it’s always a good idea to weigh the potential costs and consult with experts.
And if you’re looking to enhance your outdoor space, our landscaping contractors in Calgary are here to help!
