Alberta Provincial Budget Tax Updates 2026-2027

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February 27, 2026
2:09 pm

Overview

Alberta’s government has announced changes to its provincial tax laws in its budget 2026 Focused on what matters. This comprehensive summary highlights the key changes that will influence the Albertans’ tax environment in the coming years.

Personal Income Taxes Measures:

In 2025, Alberta introduced a new 8% personal income tax bracket applicable to the first $60,000 of taxable income. For 2026, the province will maintain these rates, reinforcing its position as a competitive low-tax jurisdiction.

The income tax rates for the 2026 taxation year, based on your taxable income, are as follows:

Taxable income	Rate
$61,200 or less	8.00%
Over $61,200 up to $154,259	10.00%
Over $154,259 up to $185,111	12.00%
Over $185,111 up to $246,813	13.00%
Over $246,813 up to $370,220	14.00%
Over $370,220	15.00%

The current personal combined income tax rates for top marginal tax rate effective January 1, 2026, remain as follows:

Taxable income above $370,220	Rate
Interest/regular income	48.00%
Capital gains	24.00%
Eligible dividends	34.31%
Non‑eligible dividends	42.30%

New Alberta Caregiver Credit

Effective for the 2027 and subsequent taxation years, the non-refundable caregiver credit and the infirm dependent credit will be consolidated into a new non-refundable Alberta Caregiver Credit. The credit will be available to taxpayers who support an eligible adult relative, including a spouse, who is dependent due to mental or physical infirmity.

The new credit will mirror the structure of the current Federal caregiver credit, which for 2026 provides a maximum claim amount of $13,180 and is gradually phased out where the dependent’s income is between $20,956 and $34,136. These indexed thresholds will apply once the new credit comes into force.

Corporate Income Taxes Measures:

There are no proposed changes to corporate income tax rates or to the $500,000 small-business limit for 2026.

Accordingly, the corporate income tax rates for Alberta in 2026 remain as follows:

	Provincial tax rate	Federal and provincial combined tax rate
Small-business tax rate[1]	2.00%	11.00%
Manufacturing and processing tax rate	8.00%	23.00%
General corporate tax rate	8.00%	23.00%

New Data Centre Levy

Effective January 1, 2026, Alberta implemented a new levy on large-scale data centers applied on the value of their computing equipment. The highest rate is at 2%, with lower rates available to data centers who provide their own power solutions. The levy will be creditable against Alberta corporate income tax. The budget also announced the province’s intention to introduce legislative amendments to provide for a 0% rate on the portion of the levy attributable to power not sourced from Alberta’s electricity grid.

Other Tax Measures:

New Vehicle Rental Tax

Effective January 1, 2027, Alberta introduces a vehicle rental tax at a rate of 6%. The new tax will apply to passenger vehicles with eight seats or less. Vehicles under long-term car leases or non-passenger types of vehicles, such as cargo vans and moving trucks, are excluded from the tax.

The tax will apply to the price of the vehicle rental, excluding the Goods and Services Tax (GST). Itemized charges for insurance and fuel will also be excluded from the tax, as other provincial taxes already apply on these charges.

Tourism Levy Rate Increase

Effective April 1, 2026, the tourism levy rate will increase from 4% to 6%. The levy applies to the price of short-term accommodation (stays of less than 28 consecutive days) in Alberta, including hotels, inns, motels, and bed and breakfasts.

Education Property Tax Increase

As announced in Alberta’s 2025 Budget, the province committed to increasing the education property tax over two years to fund one-third of education operating expenses.

For 2026–27, the rate will rise from $2.72 to $2.84 per $1,000 of equalized assessment for residential and farmland properties, while the non-residential rate will increase from $4.00 to $4.17 per $1,000 of equalized assessment. The education property tax is expected to fund 33.4% of the province’s education operating costs in 2026–27.

For further information, visit https://www.alberta.ca/budget

[1] Applies to the first $500,000 of active taxable income of Canadian-Controlled Private Corporations (CCPCs).

Contact Our Team Of Experts

This article was prepared by the individuals listed below. For further information on the above, we invite you to please reach out to Danny Guérin of Andersen Inc.