Atlantic Canada property tax & COVID-19: Provincial and municipal responses
Tax Deferral and Abatement Programs
To date most municipalities are offering some form of deferral of property tax obligations and most municipalities are also offering some kind of forgiveness of interest for arrears for a defined period. In regards to abatement or discount of property tax obligations, municipalities are limited in their ability to raise capital and cannot run deficit, given that property taxes account for more than 80% of their revenue in most cases. In order to provide abatements, municipalities will need provincial and/or federal support.
Provinces have greater flexibility due to their ability to run deficits, greater borrowing authority and capacity, and broader revenue sources. For example, British Columbia recently announced a cut to property taxes such that business and light and major-industry property classes will see their school tax component cut in half. The goal of this cut was to allow businesses that own their property to obtain immediate relief and commercial landlords can cascade savings to their tenants. Similarly, Alberta Premier Jason Kenney stated the government would be reversing the education property tax increase announced in its 2020 budget.
At the time, to our knowledge, the only municipalities to offer any type of abatement programs is City of Corner Brook and the Town of Paradise in province of Newfoundland & Labrador. Most municipalities are currently offering some type tax deferral programs or interest penalty forgiveness program.
The province collects and distribute all property tax revenues for all of the province’s municipalities and is therefore in a unique position to offer relief swiftly however to date have announced that interest payments after the due date of May 31st, will be reviewed on a “case by case” basis. The province has also recently announced that the property assessment appeal deadline will be extended one month to May 1st, 2020.
*NEW* As of November 16th, qualified hospitality owners may be eligible for a 25% discount to the final property tax bill for fiscal 2020/2021 year. Link https://novascotia.ca/coronavirus/Tourism-Accommodations-Real-Property-Tax-Rebate-Program/#operators
Here is a summary of the programs available to date by the following municipalities:
The Municipality will be suspending interest on all accounts, effective immediately, until June 30th. Interest for July 2020 will also not apply for accounts paid by July 31st. Payment deadline has been extended until July 31st for the 1st interim bill.
Cape Bretton Regional Municipality (CBRM)
Cape Breton Regional Municipality will not be taking action on overdue tax and water bills for at least 90 days in or around June 27, 2020
Newfoundland & Labrador
Newfoundland is one of the only provinces with both a business tax that is directly invoiced to the business tenant/occupant or property owners and property taxes that are invoiced to each property owner. It is also the only province in Atlantic Canada currently offering tax abatements.
- The City will not charge interest on 2020 residential and commercial property tax amounts owing for the months of March and April.
- The City will not charge interest on 2020 business taxes owing for the months of March and April.
- Outstanding balances for previous tax years will still be charged interest.
- The City will provide a two month business tax holiday for qualifying businesses most significantly impacted by the COVID-19 outbreak.
- Business taxpayers are eligible for up to $500 per month subject to application.
- Businesses that have already paid their 2020 taxes in full will have a credit applied to their 2021 tax bill
- To assist in providing some relief, Council has extended the interest free municipal tax payment deadline to June 30th, 2020
- Effective immediately, the Town will be extending the date when interest will be charged on overdue accounts from February 28, 2020 to June 30, 2020.
- Payment deadline extended until May 29th.
Conception Bay South
- For any resident/business who has signed up for our Equal Payment Plan, the town will defer payments upon request, without penalty until July 2020
- Upon request, payments will restart in July, and will be updated to reflect paying your balance by December 31. To request this deferral, please email email@example.com.
- The Town will not charge interest on any late payments until June 2020
- Council will provide some immediate short-term relief by waiving interest on overdue accounts for the year 2020 to June 30, 2020.
- Residents availing of a pre-authorized payment plan may request an interest free deferral of monthly payments from April 1st until July 1, 2020. If they re-apply for the pre-authorized payment plan by July 1st, the monthly amount will be equal payments from July to December without interest charges.
- Any tax agreements currently in place that do not accrue interest, will be deferred without interest or penalty.
- A two month “Tax Holiday” has been created for “qualifying businesses” Must be applied for in order to be granted – up to $500 per month in relief.
Grand Falls Windsor
- Waiving interest on taxation up until August 31st, 2020. This applies to business tax, commercial tax, residential tax and water and sewer tax.
- The City of Mount Pearl announced that it will be waiving all interest on business tax, commercial property tax, residential tax, and water bills until September 30, 2020.
- The town is offering to defer all residential, commercial and business tax payments until the end of June, with no interest charged until June 30.
- Tax payment deferral is also available for any residents who have already made arrangements for payment of taxes. If you have set-up pre-authorized debit payment or submitted post-dated cheques for payment of taxes and you would like to avail of tax deferral, complete the Tax Payment Deferral Form. and submit it via email.
- The City will not be charging interest on commercial and residential property taxes or water meter tax up to and including August 31, 2020.
- Relief does not apply to Robin Hood Bay tipping fees; however the scheduled tipping fee increase from $67.60 to $75 has been delayed from April 1, 2020 to August 1, 2020.
- To further alleviate the pressures, commercial property owners will see the vacancy allowance claim period extended.
- Claims for the first quarter normally due April 30, 2020 are not due until May 31, 2020. Finally, the commercial tax bills for the second quarter normally sent early May will now be sent in early June.
- Bills will still be issued and sent; however, taxpayers will automatically not be charged interest on late payments.
How Altus Group is responding
Altus is doing everything possible to protect our clients interests and address tax concerns during this difficult time. We are engaged with industry organizations such as Realpac, NAIOP and the ICSC to advocate for measures such as tax deferral, abatement, or waiver.
We will be continuing to work with local tax authorities and municipalities to resolve appeals and we are keeping apprised of any new tax deferral or abatement programs as they are introduced by municipalities. Our list of current programs in select major municipalities will be updated on an ongoing basis.