Education Property Tax: New approach for 2027

Last week, the Government of Alberta announced significant changes to how the provincial education property tax will be calculated beginning in 2027. The new approach will lock in provincial property tax rates for three years and change how the tax rate is calculated, with implications for municipalities and property owners across Alberta.  

Alberta Municipalities (ABmunis) is still examining the impacts of the new policy but here is what we know today: 

New Calculation Process 

• The province will no longer use equalized assessments to tell each municipality how much education property tax to collect. 
• Instead, the province will set one education property tax rate that every municipality will charge directly to each property, based on current-year property assessments. 
• The rates for provincial education property tax for 2027, 2028, and 2029 will be: 
• $2.65 per $1,000 of assessment for residential and farmland properties, and 
• $3.975 per $1,000 of assessment for non-residential properties. 

Estimated Impact on Property Owners 

• The province’s 2026 budget forecasted that provincial education property taxes would increase from $3.59 billion in 2026 to $3.79 billion in 2027. Albertans will still see an increase in education property taxes next year, but initial estimates suggest it will be $99 million lower than what was previously forecasted.  
• In municipalities where property values have been growing quickly, the new system may result in a higher education tax paid by property owners compared to if the current system was maintained. To address this: 
• Property owners in an estimated 30 municipalities will receive a one-time tax credit from the Alberta government.  
• The affected municipalities will be required to issue the credit to each property owner through the 2027 property tax bills. 
• A list of the affected municipalities is currently not available. The province will contact those municipalities once the amount of the credit is known, likely in March 2027.  

What is Alberta Municipalities’ initial view on the changes?  

The new system has some benefits but does not address the overall burden of property taxes and affordability challenges that Albertans are facing.  

The positive is:  

• Municipalities will welcome the predictability of the new system as municipalities will now know the impact of the province’s property tax when councils deliberate their municipal budget.  
• The new system will be easier to explain to residents.  

The negative is:  

• Overall, the province’s property tax will still increase in 2027. This is on top of the $1.1 billion increase in provincial education property taxes over the last three years, which have increased affordability pressures on Albertans.  
• Municipal leaders are likely to still take the blame for the tax increase because municipalities will still have to collect the province’s tax.  
• ABmunis understands that education costs have increased due to inflation and population growth, but it’s a policy choice to recover 33 per cent of this cost from property taxes instead of from income tax or other taxes. 
• For the estimated 30 municipalities that must issue the tax credit in 2027, this will add bureaucratic red tape and administrative costs to apply the credit. It will also require extra work by councils and municipal staff to explain the credit to residents in 2027 and could cause confusion for property owners when the credit disappears in 2028. 

Watch for more information in an upcoming issue of The Weekly newsletter, where we’ll take a closer look at:  

• How the new system compares to the current system. 
• What this might mean for property owners in your municipality. 
• What will happen in three years when the tax rate freeze ends. 
• And other details. 

In the meantime, any questions may be directed to the taxprogramdelivery [at] gov.ab.ca (Government of Alberta).