Rebates and deferral program

Vacant unit tax rebate review

  • 73 per cent of the City rebate funding came from residential taxpayers
  • 133 commercial or industrial properties received a rebate, totalling $807,000
    • $472,000 – City tax portion
    • $328,000 – Education portion
    • $7,000 – BIA portion
  • Of those 133 properties:
    • 37 have been vacant more than three consecutive years
    • 11 properties received a rebate over $10,000
    • 11 properties that received a rebate are in the BIA

Only owners of commercial or industrial assessed property that are entirely or partially vacant are eligible and benefit from the rebate. Seasonal, leased and residential properties are not eligible for the rebate.

That is a question for you to answer as there are two different viewpoints.

Here are some things to consider:

  • The current system requires all taxpayers to compensate those taxpayers who receive the rebate.
  • Advocates of the current system argue its value in reducing costs for long-term vacant properties
  • Those opposed to the program argue it may discourage some property owners from leasing their property or from facilitating renovations to make their property more appealing for lease.
  • Chronic and long-term vacant properties have their property assessment adjusted to account for vacancies before the vacant rebate is applied. Those opposed to the rebate view the combining of the property adjustment and rebate as double-dipping.
  • Administering the program is very labour intensive. Due diligence must be completed on each application to verify the duration of vacancy as well as adherence to all eligibility requirements. Approximately 275 hours of staff time is spent administering the program annually. This does not include the time spent by the Municipal Property Assessment Corporation in determining the vacant unit assessments.

No. Ontario is the only province where commercial and industrial property owners are eligible for a vacant unit tax rebate.

Seventy-three per cent (73%) of the City portion of the vacant unit tax rebate is funded by residential taxpayers even though residential property owners are not eligible for the rebate if their property is vacant.

In 2016, the total City portion equalled $472,000 or 0.25 per cent of the total tax levy.

The vacant unit tax rebate was implemented in 1998 as the Province moved the tax billing liability to property owners from tenants. At that time it was mandatory for municipalities to provide the vacant unit tax rebate. As of January 1, 2017 this rebate was no longer mandatory.

In response to municipal and stakeholder requests, the Province is allowing municipalities to propose changes to their Vacant Unit Tax Rebate Program and Vacant and Excess Land Subclasses Discounts. This will allow municipalities to tailor the rebate and discount program to local needs after engaging with the local business community and taxpayers as a whole.

The City is taking this opportunity to review its program and consider changes.

Keep the program as is

The City continues to administer the program as they do today.

Eliminate the program immediately

Benefits

  • Eliminates the double-dipping associated with the current program
  • Eliminates the disparity with residential properties
  • Promotes tax equity – all properties pay annual taxes based on current value assessment
  • Promotes vacant properties to find tenants for their vacant properties, especially short term leases
  • Net property tax amounts for all property owners would decrease
  • The City would efficiently allocate staff resources by eliminating the administration costs associated with this program
  • City and MPAC staff will have more time to focus on building and maintaining the City’s assessment base
  • Drawbacks

    • Property owners who receive the rebate will no longer receive that funding
    • Net property tax amounts for property owners who currently receive the rebate would increase

    Phase out the program over a number of years

    Benefits

    • Rebate funding remains available for the phase out period

    Drawbacks

    • Significant fiscal and time requirements to administer to the program
    • City and MPAC staff focus time on rebate instead of maintaining and growing assessment base
    • Disparity remains between residential properties who fund rebate but are not eligible
    • Does not promote tax equity – provides a rebate to a small portion of the City’s population
    • Provides a financial incentive for properties to remain vacant

    Keep the rebate but modify the program

    Benefits

    • Rebate funding remains available

    Drawbacks

    • Significant fiscal and time requirements to administer to the program
    • May increase time requirements to administer as more due diligence required
    • City and MPAC staff focus time on rebate instead of maintaining and growing assessment base
    • Disparity remains between residential properties who fund rebate but are not eligible
    • Does not promote tax equity – provides a rebate to a small portion of the City’s population
    • Provides a financial incentive for properties to remain vacant

    From September 18 through 29, public input was gathered through an online survey. This input will be provided to Council for their consideration in a staff report on November 6.

    • No, if your property was vacant in 2017 and you qualify you can still apply for the rebate
    • Eliminating the rebate retroactively would be unfair to property owners who have budgeted and forecasted for the rebate to be received in 2018

    Charity property tax rebate

    Under provincial legislation, every municipality shall have a tax rebate program for eligible charities for the purposes of giving them relief from taxes on eligible property they occupy. This rebate is governed by Section 361 of the Municipal Act.

    However, for a charity to be eligible for this rebate, it must be a registered charity as defined in subsection 248(1) of the Income Tax Act (Canada) that has a registered number issued by the Canada Customs and Revenue Agency and occupy a property that is in a commercial or industrial tax class.

    Guelph City Council has approved a 40% rebate of the taxes payable by the eligible charity on the eligible property it occupies.

    An eligible charity shall make application to the municipality each year for which a rebate of taxes is requested, such application to be made on the prescribed form after January 1 of the year and no later than the last day of February of the following year for which application is being made. Each application must be accompanied by proof of taxes paid.

    Payment of one-half of the rebate must be made within 60 days after the receipt of the application. The balance is payable within 120 days of the receipt of the application, with adjustments (if any) being made after the issuance of final tax bills for the year.

    Registered charities must apply every year for the rebate by completing an application and returning it to the City of Guelph, Tax Office, 1 Carden Street, Guelph, ON N1H 3A1.

    Applications are available by calling the City of Guelph Tax Office at (519) 837-5605, by fax at (519) 837-5647 or by printing the form.

    56 kBApplication for Charitable Rebate Form

    Vacant unit rebates (Commercial/industrial properties)

    In Ontario, municipalities may provide a tax rebate to eligible property owners who have vacancies in commercial and industrial buildings. Eligible property owners experiencing a vacancy must apply to the City for this rebate after the property has been vacant for 90 days. Currently the rebate is 30 per cent for vacant commercial space and 35 per cent vacant industrial space. The owner may collect the rebate in perpetuity if it remains vacant.

    Commercial and industrial buildings with vacant areas may be eligible for a tax rebate. To qualify, the property, unit or suite must be vacant for 90 consecutive days, and the property owner, or an authorized agent must submit a Commercial/Industrial Vacancy Rebate Application.

    Commercial/Industrial Vacancy Rebate Application

    Up to two applications per year may be filed; one for the first six months of the year and one for the last six months of the year. Alternatively, one application may be filed for the entire year. The deadline for applications in any given tax year is February 28 of the following tax year.

    • Commercial properties can qualify for a rebate up to 30 per cent of the fully occupied taxes
    • Industrial properties can qualify for a rebate up to 35 per cent of the fully occupied taxes

    Rebate amounts will depend on the number of days of vacancy, and the portion of the assessment of the building not occupied.

    Copies of additional documents should also be submitted (expired leases or media advertisements, utility records or any other material that would substantiate the application). When submitted by an  agent, a signed letter of authorization must accompany the application. Applications will be monitored and are subject to verification through site inspections or inquiries by the City of Guelph.

    Return the completed application and supporting documents to:

    City of Guelph, Tax Office
    1 Carden St, Guelph,
    ON N1H 3A1
    519-837-5605
    Fax 519-837-5647
    tax@guelph.ca

    Deferrrals for seniors and persons with disabilities

    Low income seniors who are in receipt of the Guaranteed Income Supplement (GIS) or benefits under the Guaranteed Annual Income System (GAINS) Program and have attained the age of 65 years and low-income persons with disabilities who are in receipt of benefits under the Ontario Disability Support Program (ODSP) or in receipt of disability benefits under the current Family Benefits Act (FBA) or in receipt of benefits under the Guaranteed Annual Income System (GAINS) for the Disabled and be eligible to claim a disability amount as defined under the Income Tax Act may apply to the City of Guelph for a partial tax deferral of their annual property taxes.

    Relief is based on the total tax increase over the previous year which is equal to or greater than $300 annually. The amount of tax relief granted represents a lien against the property.

    Applications for tax relief must be made annually to the City to establish eligibility or continued eligibility. Applications must include documentation in support thereof to show that the applicant is an eligible person and that the property with respect to which the application is made is eligible property.

    Applications must be submitted to the City on or before the last day of December in the year for which the application applies, on a form prescribed by the City for this purpose Applications are available by calling the City of Guelph Tax Office at (519) 837-5605, or by printing the Application form.

    Deferral of taxes for Low-Income Seniors and Low-Income disabled Persons

    Tax relief is only allowed on one principal residence of the qualified individual or the qualifying spouse. Either the owner or spouse of the owner has been assessed as the owner of and has occupied the property for a period of one or more years preceding the date of application

    For properties which are jointly held or co-owned by persons other than spouses, all coowners must qualify under applicable eligibility criteria in order to receive tax relief. Tax relief applies to current taxes only and are only deferred after payment in full is received for any current or past year amounts payable.

    Tax relief amounts are not transferable to the estates of deceased owners. Any tax relief ceases to apply once the property is sold or when the eligible applicant dies or ceases to be eligible under the criteria established by by-law. Any deferred amounts immediately become a debt payable to the City.

    Completed applications can be returned to the City by mail to: City of Guelph, Finance Dept.- Revenue & Taxation , 1 Carden St, Guelph, On N1H 3A1 or by fax to 519-837-5647.