Town staff recommend elimination of tax rebate for vacant properties

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Owners of vacant commercial or industrial property that has been empty for longer than 90 days are eligible, if they meet certain criteria, for a 30 per cent rebate on their property taxes. That’s something Town staff, along with their counterparts across Muskoka, would like to change.

Locally, the Vacant Unit Rebate is administered by the District of Muskoka under the Municipal Act. In its 2016 Ontario Economic Outlook and Fiscal Review, the Province is allowing municipalities to tailor their vacancy rebate and reduction programs. That has led some Ontario municipalities to vote in favour of eliminating the rebate altogether, and those in Muskoka may follow suit.

“A lot of other towns and cities have opted to get rid of it primarily because they haven’t seen that it is stimulating landlords to make sure that their properties are not vacant,” said Julia McKenzie, Manager of Finance/Treasurer for the Town of Huntsville. “If somebody has a vacant property, they can apply for the rebate as long as they meet the criteria and they can get the rebate indefinitely right now. It’s reducing the incentive to get storefronts and downtowns and other areas with full tenants.”

McKenzie said that the treasurers of the municipalities comprising Muskoka have noted several concerns with the existing rebate: high administration requirements; no limit on the number of years property owners can apply for it; benefit only for commercial and industrial properties, not residential or multi-residential; and the rebate is being subsidized by other property classes. “All of the treasurers are in agreement with eliminating the program,” she said.

The changes would affect owners of vacant property but not vacant land, which is subject to evaluation by MPAC. (Read the full treasurers’ report here.)

Vacant Unit Rebates in 2017 for each of Muskoka's municipalities

Vacant Unit Rebates in 2017 for each of Muskoka’s municipalities

Each of the municipalities in Muskoka will hold public consultations and provide any feedback received to the District of Muskoka, which will then make a decision on whether to keep or eliminate the rebate.

In Huntsville, that public meeting will occur during the General Committee meeting on October 25, at which point staff will present a report recommending that the Town support elimination of the Vacant Unit Rebate. Anyone wishing to provide feedback can attend. The agenda will be posted on the Town’s website here a few days prior to the meeting.

At the June 28 council meeting, Mayor Scott Aitchison and Councillor Brian Thompson suggested not only that the rebate be eliminated, but that the municipality lobby for the creation of a new tax category making owners of vacant properties pay a higher rate. (Read that story on Doppler here: Should property owners pay more tax if their buildings are empty?)

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5 Comments

  1. Brenda Paterson on

    In fact, charge more the longer they have vacancies. That would be a great incentive to get busy and fill the spaces.

  2. Perhaps there could be a rebate only if the owner is actively renovating the property to make it more desirable as a rental site. This might stimulate some capital improvements to take place. There would need to be criteria and time limits but building inspection would be involved in the renovations and maybe it could all be tied together to work to everyone’s advantage?

  3. Michael Petropulos on

    The fact is that by order of resolution, town council facilitated both the relocation of key anchor tenants from it’s downtown core and the development of big box stores elsewhere, thereby orchestrating urban sprawl and the current “25% vacancy rate” downtown that they are currently attempting to scapegoat existing property owners for. All the while they were expressly forewarned of the resulting consequences. Blaming and penalizing property owners for council’s stupid decisions make absolutely zero sense and does nothing to help either the owners nor the Town, who’s interests in re-letting the vacancies are mutually aligned. Brian Thompson obviously has his head in the sand if he thinks that “there’s a need for rental space downtown” when vacancy sits at 25%. Trying to rationalize the vacancies as advantageous to property owners because they can utilize this as a “tax write off” is equally as ridiculous, unless you are a Columbian drug cartel laundering money. I, for one, am appalled by the intrusion that the B.I.A. mafia is attempting to make in usurping the reasonable rights of property owners in exchange for their own self- interests. The dynamics here are really fairly simple: Supply, thanks to the short sightedness of our elected officials, is significantly greater than demand. Distorting the optics is advantageous to no one except for maybe councillors seeking votes for re-election.

  4. The reasons why the rebate should be eliminated were provided by the tax collectors for Muskoka….I find their reasons for doing away with the subsidy far more compelling than the argument provided by a person receiving this unwarranted gift at taxpayer expense. Stick with the advice from our well paid professional staff Brian.

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