Province approves removal of tax rebates for vacant properties in Muskoka

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The District of Muskoka announced today that it has received authorization from the Province for its lower-tier municipalities to eliminate the Vacant Unit Rebate, effective January 1, 2018.

The Vacant Unit Rebate program allows property owners who have vacancies in commercial and industrial buildings to apply for a tax rebate. In Muskoka, the program provided a 30 per cent reduction to the property taxes levied if the unit met eligibility criteria.

Huntsville and the other Muskoka lower-tier municipalities held public meetings and consultations late in 2017 regarding elimination of the rebate.

“Feedback from the business community and analysis from municipal staff determined that the vacant unit rebate program benefited relatively few property owners for a proportionately large cost and did not encourage steadfast occupancy of commercial and industrial buildings,” noted a District media release. “The rebates were effectively funded by the rest of the property tax base.”

The Ministry of Finance has amended O. Reg. 325/01: Tax Matters – Vacant Unit Rebate to exempt lower-tier municipalities in the District of Muskoka from the requirement to provide tax rebates for property with vacant portions for 2018 and subsequent taxation years.

In June 2017, Mayor Scott Aitchison and Councillor Brian Thompson also suggested that owners of vacant properties should be made to pay higher taxes. Read that story on Doppler here: Should property owners pay more tax if their buildings are empty?

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7 Comments

  1. It’s about time. The taxpayer has been on the hook for too long.
    They might have to lower the rent a little, but at least it will be rented.

    • I agree, Bob. It should be more of a free market. In a free market, when there is an abundance of supply (in this case, rental units), the price should come down to meet the price that the shopkeepers are willing and able to pay. When the owners get a large rake-off on their real estate taxes, they become much less anxious to rent the space.

      I have a friend in another town who wanted to start a small business. But the prices that the owners of business spaces were charging was so high that she knew she couldn’t pay the high rent and still make enough of a profit to carry her over any slow period. She figured that she would probably have to go out of business during a slowdown and maybe even lose money, if she was stuck with a lease. She had been planning to employ herself and a couple of other people.

      Politicians always say that they are in favor of small business owners as those employing the largest number of workers. But they never seem to do anything to help them. Liberal politicians especially favor the large corporations and pay little attention to the owners of small businesses–except to try to tax them to death.

      To return to the subject of market distortions in real estate, real estate agents and developers are becoming obscenely wealthy as they are, in many cases, hand in hand with real estate speculators. Together, they bid up the price of land and buildings to ridiculous levels.

      Meanwhile, would-be business owners become more and more discouraged by government red tape, powerful bureaucrats and taxes. Lowering rents would help them, but what would help them even more is to get the high cost of government off of the backs of all the people–so that the people have more of their own money to spend.

      Eventually, the merry-go-round of “high-spend-high-tax” policies will come to an end because every single tax dollar will be spent on servicing the debt (and into the pockets of the elites who own this horrendous mortgage on the future). Taxes will rise to the point where more and more people will go backward in their attempts to save for their retirements. There will be little left for government programs or for the people to live on.

      Prosperity is dependent on the productivity of the people. Our productivity is declining because we have this enormous and growing monster of government sitting on top of us. During the last 14 years of Liberal rule, 300,000 manufacturing workers were lost (that’s real productivity as measured by the goods and services cranked out by them) but, lucky us, we gained 300,000 workers on the rolls of Ontario government workers. Front line workers in healthcare and education actually provide a valuable service–and are to be commended for their dedication to their jobs. But, the paper pushers in the bureaucracy supply little of value at ridiculously high salaries.

      Just one example is the CEO of Hamilton Health Sciences who receives $600,000 per year (two years ago, he collected another $100,000 for a contribution to his pension fund). He has no background in healthcare at all–he is a lawyer. His previous job was to be on the Provincial payroll as the President of Mohawk College (he has no background in teaching or education either). Before that, he was the head of the crown corporation (read “on the government payroll”), Metrolinx–and again, he had no background in in that area (transportation) either. And each time, he was probably surrounded by highly paid bureaucrats who presumably did understand those entities. If you check the “Sunshine List” you will notice a LOT of people on the list who work for Metrolinx and Mohawk College (same is true of Hamilton Health Sciences).

  2. Craig Nakamoto on

    On Main Street there should almost be penalties for vacant properties after a certain amount of time. Some people have too much money and just don’t seem to care about their community.

  3. Len Macdonald on

    I never understood why an absentee landlord would be incentivized to keep potential retail space vacant.
    Now they will be encouraged to find tenants for the empty storefronts that are a blight on our towns.

    • I agree, Len. Often, the owner of an empty storefront is a real estate consortium which is holding onto a property as a speculation. They hope to sell the property for a profit after a general rise in real estate prices–especially if they think they might get money from local government to perform repairs to the property. Instead, what should happen is that an owner has only so many months of being empty before the local government exercises “eminent domain” and takes the property at a “just” price (that is written into the eminent domain laws). That would eliminate empty storefronts almost overnight. And in the case where the local government does take over the property, it could be used for civic purposes–for the betterment of the community. I have seen old abandoned buildings refurbished and made into “business incubators” for would-be entrepreneurs to form their small businesses.

    • Instead of removing it completely, the rebate should only be available over a finite period of time.

      As an owner of a commercial property on King William Street Huntsville, I know first hand the issues involved with new small business.

      Many failed business owners will leave on a Saturday afternoon, in the their first year of leasing, in January – with absolutely no notice at all to their landlord. No attempt at negotiating, just up and gone.

      It’s a big risk owning commercial real estate in small towns. Taxes are exorbitant and a rebate comes as welcome relief during 6 to 8 months of vacancy.

      As usual, the negligence of a few absent landlords in Huntsville ruin the ‘safety net’ for the majority of mom and dad investors.

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