Property taxes generated from a data centre

The Government of Alberta is taking steps to become North America’s destination of choice for artificial intelligence (AI) data centre investment. Data centres can be a source of property tax revenue for your community, but municipalities should be aware that not all components of a data centre are subject to assessment for municipal property tax.  

In general terms, municipalities can expect the land, building envelope, and power generation components to be subjected to assessment and property tax. The computing equipment is not subject to assessment, and can represent the majority of the cost of development. Municipalities will need specific details from a proposed developer to estimate the potential revenue for your municipality.  

Components of a data centre that are eligible for property assessment are: 

• Power generation and back-up power components
• The building and improvements
• Cooling, heating, ventilation, air conditioning (HVAC) systems
• Electrical, fire suppression systems, chillers, pumps, cooling towers, air-handling units, or other mechanical or security systems serving the building or site as a whole
• The land and improvements to the land (e.g. fences, retaining walls, landscaping, etc.) 

Data centres that use over 75 megawatts or that are capable of connecting to the electrical grid will be assessed by the province as Designated Industrial Property.  

For more information about the assessment of data centres, email MA.APTP [at] gov.ab.ca (Municipal Affairs).