Taxing buildings: eliminating vacancy rebate

NRU
May 17, 2017
By Sarah Niedoba

Whitchurch-Stouffville wants to eliminate its vacancy rebate program, which would save the town thousands of dollars each year.

Since 2001, the province has required municipalities under the Municipal Act to have a vacancy rebate program. The program grants property owners a tax rebate of 30 per cent for vacant commercial properties and 35 per cent for industrial ones. The program costs Whitchurch-Stouffville an estimated $25,550 per year.

However, in December 2016, the province announced that municipalities would be free to adopt their own policies. As a result, York Region is working with its area municipalities to develop a consensus on how to move forward. The final decision will be sent to the Ministry of Finance.

Options the region is considering include reducing the tax rebate, phasing out the rebate over two to five years, and decreasing the amount of documentation required to apply for a rebate.

Meanwhile, Whitchurch-Stouffville staff is recommending the complete elimination of the program.

In a report to council, staff argues that the program is poorly designed, difficult to monitor and a drain on labour resources.

Staff notes that the Municipal Property Assessment Corporation already takes into account a property’s vacancy status when establishing its value. Given this, staff consider the adding of a rebate to be “double
dipping.”

The current program also requires a minimum period of 90 days of continuous vacancy to come into effect, which staff says discourages landlords from accepting short-term leases. Staff argues that eliminating the program will put pressure on the owners of vacant units to keep their properties leased and maintained.

Council considered the report at is meeting yesterday after deadline.

York Region and its nine area municipalities are hosting a public information session about the program on May 30.