Calculation Updates

What changed

Property tax is calculated per parcel using the published City of Edmonton rates for the applicable assessment class.

A project’s class now follows how it is held. A held multi-unit project is assessed as Other Residential rather than Residential.

Property tax shown in the report and in the analysis could previously differ for the same project. Both now use the same figure.

Why it changed

The City assesses residential and other residential property at different rates, published in City of Edmonton Bylaw 21442, Schedule A, 2026. The residential rate is 0.0103637, made up of municipal 0.0077419, education 0.0025409, and requisition allowance 0.0000809. Other Residential is 0.0108282, which is 4.48% higher. Applying the rate for the class a project actually falls into gives a more accurate operating cost.

A property analysis should return one property tax figure wherever that value appears or is used in another calculation.

Which results may be affected

Results that may change:

• Property tax
• Net operating income
• Debt service coverage
• Loan sizing
• Cap rate
• Cash-on-cash return
• Hold versus sell results
• The Feasibility Verdict

Tax increases slightly for a held multi-unit project, so net operating income decreases. The size of the change depends on the assessed value and the number of units.

What to review

If you ran an analysis before the date of this entry, review property tax, net operating income, debt service coverage, and the Feasibility Verdict.

Rerunning applies the current rates and class.

What changed

The basement floor area is now priced as a distinct cost component. Previously, it was charged at the same rate as above-grade construction.

The above-grade construction rate has been updated to $155 per square foot, down from approximately $200 per square foot.

The below-grade basement rate is now set at $85 per square foot, applicable only to finished basement areas.

Why it changed

Previously, basement areas were charged the full above-grade construction rate, even though the foundation was already included in the above-grade cost. This resulted in double counting of the foundation.

The rates have been calibrated based on current costs observed by a working Edmonton infill builder.

Please note, these are Parsla estimates, not official City of Edmonton data. Our Analysis default, builder calibrated August 19, 2026.

Which results may be affected

Any analysis dependent on construction costs may be affected, including:

• Hard construction costs
• Total project costs
• Cost per square foot
• Return on investment
• Cash-on-cash return
• Debt service coverage
• Hold versus sell evaluations
• The Feasibility Verdict

Costs have decreased in every case. No project will be perceived as less feasible than prior to this update.

The most significant impact will be on projects involving basement suites, as these previously included double-counted foundation costs.

What to review

If you conducted an analysis before August 24, 2026, please review the total project cost, cost per square foot, and Feasibility Verdict.

Re-running the analysis with the current rates will incorporate these updates.

What changed

The minimum debt service coverage ratio now follows the financing product used in the analysis.

CMHC MLI Select financing is measured against a minimum DSCR of 1.10. Conventional financing is measured against 1.25. Where the financing product is not known, 1.25 applies. All cash projects do not receive a debt service coverage test because there is no debt to service.

The minimum shown in the analysis and report now reflects the threshold being applied to that project.

Why it changed

Different financing products are underwritten using different debt service coverage requirements. Applying the financing specific threshold provides a more accurate assessment of whether projected income can support the proposed debt.

It also ensures the same DSCR requirement is applied consistently throughout the analysis.

Which results may be affected

The Feasibility Verdict, debt service coverage ratio, and the minimum DSCR shown for the project may change.

An MLI Select project with a DSCR between 1.10 and 1.25 may now meet the financing threshold where it did not previously.

A conventional project below 1.25 may no longer meet the financing threshold.

What to review

If you ran an analysis before August 9, 2026, review the Feasibility Verdict and debt service coverage ratio against the financing product selected for the project.

For an all cash project, no debt service coverage test applies.

What changed

Rental income values could previously differ between the pro forma and the detailed rent roll.

Rental income is now based consistently on the rent roll throughout the analysis and report.

Why it changed

A property analysis should return one consistent rental income figure wherever that value appears or is used in another calculation.

This update removes the possibility of different rental income values being used within the same analysis.

Which results may be affected

Any result that depends on rental income may change, including:

• Gross rental income
• Net operating income
• Debt service coverage
• Cap rate
• Cash on cash return
• Hold versus Sell results

The effect will depend on the property and unit assumptions used in the original analysis.

What to review

If you ran an analysis before August 5, 2026, review the gross rental income shown in the pro forma and the results calculated from it.

Rerunning the property will apply the current rental income calculation throughout the analysis.

What changed

Charter Bylaw 21474 lowered the maximum building height in the RS zone from 10.5 metres to 9.5 metres, effective August 1, 2026.

Parsla now applies the 9.5 metre maximum height to RS parcels.

Why it changed

The City of Edmonton changed the zoning regulation.

Parsla applies the zoning rules in force for the property being analyzed, so the calculation was updated when the new height limit took effect.

Which results may be affected

Projects that relied on the previous 10.5 metre maximum may now return a lower development capacity.

Depending on the proposed development, this may affect:

• Storey count
• Buildable floor area
• Unit count
• Projected revenue
• Overall feasibility

Projects that did not rely on the previous maximum height may be unaffected.

What to review

If you ran an RS property analysis before August 1, 2026, review the permitted height, storey count, unit count, and resulting feasibility.

Rerunning the property will apply the current 9.5 metre maximum height.

What changed

Operating expenses used to be estimated as a single percentage of income. They are now calculated as individual line items: property taxes, insurance, management, repairs and maintenance, replacement reserve, utilities, and licensing. Vacancy is shown separately, because it is deducted before operating expenses rather than being one of them.

Why it changed

A single percentage is a rough approximation. Real operating costs do not move together, and a flat rate hides which assumption is driving the result. Itemizing produces a more accurate net operating income, and it lets you replace any estimate with your own number.

Which results may be affected

Net operating income, cash flow, debt service coverage, and any figure derived from them. In some cases the difference is enough to change whether a project reads as feasible.

What to review

Open the Operating Expenses tab in your project. Every line shows Parsla’s estimate and every line is editable. The P&L tab shows the full picture, from gross rental income through to net operating income and cash flow.