Homeowners in Yellowknife may have been alarmed last week when they opened their new property tax assessments from the city.

Property values in the city have gone up by 40 per cent since 2005.

But the city’s director of corporate services, Carl Bird, says that jump won’t affect tax payments.

He says the city plans to reduce the mill rate, which is used to calculate taxes based on the assessed value of a home.

“We will be reducing that mill rate by the same factor that the total assessed value is going up," Bird says.

The city blames inflation for the jump in property values.

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'The City of Yellowknife has actually been doing quite well,' says Mayor Mark Heyck, of a predicted 3 per cent hike in property taxes. (CBC)

It says general assessments are done every five to seven years, and that property assessments are now up to date.

Overall, the city predicts a property tax increase of just over three per cent this year, or about $57 a year for a property assessed at just over $200,000.

"The City of Yellowknife has actually been doing quite well,” says Mayor Mark Heyck. “Places like Calgary and Edmonton this year saw a tax increase of between five and six per cent."

City budgets $81.4 million 

The city’s total budget is expected to be $81.4 million this year.

That’s almost $7 million more than last year.

The city says it has to keep up with inflation, said Heyck. The mayor said the money will also be used to add new bus routes, more city garbage cans and pay construction costs of the city’s new water treatment plant.

Yellowknifers will also pay a bit more this year to use the city's recreation facilities, and for water, sewer and garbage services.

But the city says it’s also working at cutting long-term costs by installing bio-mass boilers and replacing street lights with energy efficient LEDs.