Albertans will pay less in income taxes but education levy will go up — and up again
Alberta’s new budget means nearly all working residents will pay less in income taxes, while home and business owners — especially those in Calgary — will pay more in provincial property taxes.
The province also expects to take in more money from several other new taxes and fees.
Here are five ways that Alberta Budget 2025 may affect you.
Income tax cut
The biggest way the new budget is likely to affect you is through a reduction in the personal income-tax rate.
Alberta plans to cut the rate on the first $60,000 of income from 10 per cent to eight.
This was a promise the United Conservative Party initially made during the 2023 election campaign. The party later backed away from, saying it would not be fully rolled out until 2027.
The Thursday budget confirmed that the full cut will, in fact, take effect in 2025.
The government estimates the cut will save Albertans as much as $750 per year.
It also estimates it will cost the government roughly $1.2 billion for the fiscal year, which begins April 1.
Property tax increase
Budget 2025 also includes an increase to the provincial portion of property taxes that helps fund education.
“And it’ll go up again next year,” said Finance Minister Nate Horner.
Horner said that’s because the province wants to increase the proportion of education funding that comes from property taxes.
Two years ago, provincial property taxes accounted for 28.5 per cent of Alberta’s education funding, which marked a historic low.
The hike in the 2025 budget is expected to bring that up to 31.6 per cent.
Horner said the province plans to further hike property taxes in next year’s budget, with a goal of reaching 33 per cent of Alberta Education funding, and then holding steady from there.
The province collects this money by requisitioning it from municipalities, who must collect it from home, business and farm owners alongside their own municipal property taxes. The municipalities then flow the provincial portion through to the Alberta government.
The province plans to boost its total requisition to $3.1 billion for this fiscal year, up from $2.7 billion last year.
That’s a roughly $400 million increase, most of which will come from Calgary where average property values are higher.
The annual requisition from Calgary is expected to increase to $1.037 billion, up 17.6 per cent from the previous year.
The requisition from Edmonton is expected to jump by 8.7 per cent to $575 million.
The province estimates this will mean a $239 increase on a median Calgary homeowner’s annual property tax bill and a $92 increase for a median Edmonton homeowner.
Estimates for other municipalities were not immediately available.
Horner said the difference between Calgary and Edmonton is “directly correlated to the home values [in each city].”
Land title and mortgage fees
Changes to land title and mortgage registration fees will also bring significantly more money to government coffers from Albertans who are buying property.
For land transfers, the variable fee increased from $2 per $5,000 in property value to $5 per $5,000 as of Oct. 20 last year.
At the same time, the fee for mortgage registrations and caveats that charge the land increased from $1.50 per $5,000 in mortgage value to $5 per $5,000.
The Alberta government expects to take in $161 million from these fees in the upcoming fiscal year, the first full year in which the new rates will be in effect. That’s more than double the $77 million it expected in the previous year.
The province estimates the fees associated with the purchase of a $450,000 property with a $405,000 mortgage would jump from $401.50 under the previous rates to $955 under the new rates — an increase of 138 per cent.
No fuel tax break, new EV fees
Alberta has tied its fuel-tax rates to the price of oil and, according to Budget 2025 forecasts, there will be no break for drivers at the pumps in the upcoming year — or the year after that.
Alberta’s fuel tax was suspended for all of 2023. It was partially reinstated at nine cents per litre of gasoline in January 2024, then jumped to 13 cents per litre on April 1.
Albertans shouldn’t expect that to change anytime soon.
“As oil prices are expected to remain below $80 for the forecast period — the threshold for activating partial fuel tax relief — no fuel tax relief is expected through 2027-28,” the budget document states.
Meanwhile, the new $200 electric vehicle registration fee that kicked in on Feb. 13 is expected to generate $6 million for the government in the upcoming fiscal year.
Total fuel tax revenue is projected at $1.4 billion for the 2025-26 year.
Vape tax
One other recently implemented tax is expected to generate tens of millions of dollars more for the Alberta government.
This one comes from vapers.
A new provincial vaping tax kicked in on Jan. 1, in addition to existing federal taxes on vape products.
The provincial rate is $1.12 per two millilitres for the first 10 millilitres of a product, then $1.12 per 10 millilitres for any additional amount beyond that.
It was projected to generate just $4 million for the province in the last budget, but that estimate jumps to $33 million in Budget 2025, the first full year in which the vape tax will be in effect.
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