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TO: |
Mayor and Members of Council |
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FROM: |
Jim Baird, Commissioner of Development Services Andy Taylor, Commissioner of Corporate
Services |
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PREPARED BY: |
Regan Hutcheson, Manager of Heritage Planning Paul Wealleans, Director of
Taxation |
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DATE OF MEETING: |
March 21, 2005 |
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SUBJECT: |
Heritage Property
Tax Reduction Program - Information Report |
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RECOMMENDATIONS:
THAT the Heritage Property Tax Reduction
Program - Information Report, dated
AND THAT the Region of York be requested to
re-consider its participation in municipal heritage tax relief programs and
that the Markham Regional Councillors raise this issue at Regional Council at
the earliest opportunity.
PURPOSE:
The purpose of this report is to provide a
review of the Heritage Property Tax Reduction Program after its introduction
for the 2003 taxation year.
EXECUTIVE SUMMARY:
Council approved the implementation
of a Heritage Property Tax Reduction Program, effective
A number of property owners chose
not to participate in the program for two main reasons: the requirement of a
heritage easement agreement and the lack of participation of the Region of
York. Of those who had concerns with the
heritage easement requirement, most indicated that the financial incentive of
the tax reduction was insufficient compensation in exchange for the loss of
property rights. For others, the
Region’s decision not to participate in the program meant that for residential
properties, the 30% reduction was only applicable to 54% of their tax
bill. It is recommended that
Process improvements proposed for
the 2004 tax applications include better use of the AMANDA system for
administration of the program, and the development of a user-friendly document
to explain the components of the heritage easement agreement.
BACKGROUND:
The Ontario Government has enabled local
municipalities to offer tax relief to owners of heritage properties to help
owners maintain and restore these unique and valuable resources. On
In the Town of
At this time, only the municipal and school board
component of the taxes are subject to the 30% reduction. The school board component of the rebate is
mandatory once a local municipality adopts a program. The Region of York is not participating in
the Heritage Property Tax Reduction Program.
The Region of
A report prepared
by regional staff dated
A recorded vote at Regional Council on
To
participate, properties must meet eligibility criteria
To
be eligible for tax relief under the
Provincial Requirements: An eligible heritage property must be designated as a property of
cultural heritage value or interest under Part IV of the Ontario Heritage Act (an individual
property designation) or it must be part of a heritage conservation district under Part V on the Ontario Heritage Act; and in either
case, the property must be subject to a Heritage
Easement Agreement under section 22 or 37 of the Ontario Heritage Act.
A
Heritage Easement Agreement is required because designation alone does not
oblige owners to maintain their properties on an ongoing basis. The purpose of the tax relief measure is to
offer an incentive for heritage property conservation. Therefore, relief will be available to those
owners who have made a commitment to maintain and preserve their heritage
properties on an ongoing basis.
The
property must be subject to a Heritage Easement Agreement by December 31st of
the taxation year for which the tax relief is sought. However, for 2003, the Heritage Easement
Agreement had to be in place no later that
Municipal Requirements (Town of
a) be classified as a Group 1 property (of
major significance and importance, worthy of designation) or Group 2 property
(significant, worthy of preservation) using the Town of
b) be in a good and habitable condition.
The
purpose of reviewing a property’s heritage classification is to ensure that
main heritage attributes are evident (such as the building dates from an early
age, retains most of its original architectural features and is representative
of an architectural style, period or method of construction). The Town also wants to ensure that the
building is in good condition and is habitable (as opposed to derelict and
vacant).
Additional Municipal Requirements:
The
property must not be the subject of any Town by-law contraventions, work orders
or other outstanding municipal requirements, as of the date the application is
received by the Town.
There
must also be no outstanding municipal fines, arrears of taxes, fees or
penalties assessed against the property.
All
Property Tax Classes are eligible
Tax
reductions may apply to an eligible property within any or all of the
commercial, industrial, farm, residential or multi-residential tax classes.
The
property tax reduction applies to the building or structure (or portion of)
that is an eligible heritage property, and the lands eligible are calculated as
percentage of the total taxes levied on the property. The Town will determine the reduction amount
with the assistance of the Municipal Property Assessment Corporation
(MPAC). The intent is to ensure that the
portion of the building and land that is valued by MPAC relates only to the
eligible portion.
An application form and fees are required
Eligible
heritage property owners must apply to the Town of
As specified by provincial legislation, the
application must be made no later than the last day of February in the year
following the year for which the owner is seeking the tax relief. For the 2003 tax year, the deadline was
There
is no up-front application fee. The
application fee is deducted from the amount of the tax reduction once it is
calculated. The amount of the
application fee is 20% of the annual heritage reduction amount for the first
year and 10% of the annual heritage reduction amount for every renewal
application. This fee helps cover the
administrative costs of the program. The
fee is deducted for only the year of application.
In
addition, to further assist property owners who require a Heritage Easement
Agreement, the Town has eliminated the $300 easement agreement preparation fee.
A
thorough staff review is undertaken
The
administration of the Heritage Property Tax Reduction Program primarily
involves staff from the
The
initial Application Form allows staff to confirm that eligibility criteria are
met and to capture key property information such as current photographs of the
property, verification that the building is being maintained in accordance with
the Heritage Easement Agreement, proof of insurance coverage and any
anticipated restoration and maintenance costs for the coming year.
Staff
from the Heritage Section is also responsible for evaluating the subject
property to determine its municipal heritage classification. Only properties classified as Group 1 (of
major significance and importance, worthy of designation) or Group 2
(significant, worthy of preservation) using the document entitled “Evaluating
Heritage Resources in the Town of
DISCUSSION:
Once the program was approved in December 2003,
a comprehensive information booklet was prepared by staff to describe the
program and answer commonly asked questions.
This booklet was mailed to all those individuals who attended the public
information meeting on this topic in July 2003 and to those who had contacted
the Town indicating an interest in the program.
Notices were also placed on the Town of
For the 2003 taxation year, the Town received
38 applications. After a thorough review
by Town departments, 23 applications were approved. Of the 15 unapproved applications, 8 withdrew
because of the heritage easement requirement, 3 properties were in tax arrears,
3 had outstanding building permit issues and 1 had an outstanding site plan
issue.
Of the 23 properties participating in the
program, 22 are residential and 1 is commercial.
Of those who had concerns with the heritage
easement requirement, most indicated that the financial incentive of the tax
reduction was insufficient compensation in exchange for the loss of property
rights.
Region’s
refusal to participate in the program affected applications
A number of potential applicants did not submit
an application when informed that the Region of York was not participating in
the program. The current program offers
the 30% reduction only on the Town and Education component of the tax
bill. For residential properties, the
Region’s portion at 46.23% is the largest of the three components. Therefore, residential applicants are only
receiving a 30% reduction on about 54% of their tax bill.
For
example, on a $3000 residential tax bill (2003), the following chart
illustrates the different tax reduction amounts depending upon whether the
Region of York participates in the program:
|
Components And Percent |
Sample
$3000 Tax
Bill |
30%
Reduction |
Tax
Reduction (municipal and school board only) |
Tax
Reduction (municipal, region and school board) |
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School Board 29.5% |
$885 |
30% |
$265 |
$265 |
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Region 46.2% |
$1386 |
30% |
n/a |
$416 |
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$729 |
30% |
$219 |
$219 |
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Total |
$3000 |
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$484* |
$900* |
*
Application
Fee to be deducted from this amount
The total cost of this program to the Town for
2003 was $3525.46. The breakdown was as
follows:
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Total Rebate Amount |
$14,247.13 |
Municipal Portion of rebate |
$6,374.89 |
Less 20% Admin Fee |
-$2,849.43 |
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Total Cost to Town (2003) |
$3,525.46 |
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Education Portion of rebate |
$7,872.24 |
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Lowest Rebate Cheque |
$258.00 |
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Highest Rebate Cheque |
$708.00 |
There is no fee for the second year
of the program so the reduction amounts will be higher for the 2004 taxation
year for the above applicants. The
renewal fee for the 2005 taxation year is 10% of the reduction amount.
Staff originally anticipated a 10%
take-up (approximately 56 properties) with an estimated cost to
The cost to the Region of York if
it had agreed to participate in the program would have been approximately $12,000
for the 2003 tax year.
A meeting was held on
Another improvement to be
introduced will be the development of a user-friendly information document to
explain the heritage easement agreement.
The existing agreement is a legal document, some 13 pages in length
which has the potential to intimidate some property owners.
FINANCIAL CONSIDERATIONS:
The cost of the program is funded
from the tax write-off account. Although
the rebate for 2004 is expected to be higher because no administration fees are
charged in the second year of eligibility, sufficient funds exist in the
write-off account.
ENGAGE 21ST
CONSIDERATIONS:
This
heritage property assistance program recognizes, promotes and strengthens the
development of a Quality Community.
BUSINESS UNITS CONSULTED AND AFFECTED:
The following business units are involved in
this program:
ATTACHMENTS:
None.
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Andy Taylor Commissioner of Corporate Services |
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Commissioner of Development Services |
Q:\Development\Heritage\SUBJECT\Property
Tax Rebate Program\Applications 2004\Report on Property Tax program Feb
2005.doc
