Kam Lake denied tax forgiveness
Property owners who saw a steep increase in last year's bills told to pay up
Elaine Anselmi
Northern News Services
Published Wednesday, January 28, 2015
SOMBA K'E/YELLOWKNIFE
About 120 property owners, the majority in Kam Lake, are on the hook for $140,000 in property taxes after the territorial government denied the city's application to forgive substantial tax increases handed down in 2014.
| City to lobby GNWT
Seeing the enormous cost born by property owners following the 2013 General Assessment, Mayor Mark Heyck said the city is lobbying the territorial government to make changes to the process.
"What we pushed for and will continue to push for is legislative change at the territorial level that would allow the city to phase in a tax increase, over a certain amount, for those properties that are hit due to the effects of a general assessment.
There are a number of provincial examples of municipalities that have the power to do that," said Heyck.
"We know that the next legislative assembly will be reviewing the Cities, Towns and Villages Act and we hope that would be something that would be considered under that review and any amendments made to that legislation."
Eleanor Young, acting deputy minister of the Department of Municipal and Community Affairs, said that recommendation was on the department's radar and they are aware of the city's interest.
Within city hall, council has also directed a change to the frequency of general assessments.
"Under territorial legislation, we have to do the assessment every 10 years and we had been doing it every five. (Last year's) was stretched to a seven-year-period, so we are returning to five years," said Heyck.
"Our hope would be, when that next assessment happens ... that we would have the legislative ability from the territorial government to take some mitigation measures if taxpayers are impacted the same way."
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"The long and the short of it is that I have to pay about $15,000 in taxes in the next six months," said Niels Konge, a city councillor who owns a business in the Kam Lake industrial park.
Konge recused himself from council's November discussion of a bylaw to forgive a portion of the taxes owed by Kam Lake residents. That bylaw offered a break of between $50 and nearly $3,000 in increases to individual property taxes.
Following the 2013 General Assessment - which takes inflation and other factors into account and acts as the basis for annual assessments - the value of properties in Kam Lake increased by an average of more than 40 per cent across the community in 2014.
Council gave two readings to the forgiveness bylaw, which would extend to property owners who saw a tax increase of more than 10.74 per cent on residential properties and 31.28 per cent on commercial and industrial.
Before going to third and final reading, the bylaw required the approval of the Department of Municipal and Community Affairs (MACA), under its Property Assessment and Taxation Act. The department rejected the bylaw last month, and residents were notified within the ensuing weeks.
"That act does not allow for the city to discriminate between ratepayers in any classification. The way that the bylaw was drafted, it basically would discriminate," said Eleanor Young, acting deputy minister of MACA.
"If somebody in Kam Lake was the same class of property as someone else, they would be treated differently."
For this reason, Young said the minister could not sign off on the bylaw as written.
"Our staff had indicated to council that that was a possibility," said Mayor Mark Heyck. "From a fairness perspective, MACA may not approve the bylaw and that was the case."
Affected property owners now have until Jan. 30 to pay off the remainder of their property taxes, said Clem Hand, acting director of corporate services for the city.
The property values established by the 2013 General Assessment will act as the benchmark for future annual assessments, including the 2015 roll that was distributed last week.
"Usually with the general assessment, it's the year after that when we tend to see a spike in appeals, so its possible that that could carry over to the following year," said Heyck, noting that residents can appeal their estimates for 45 days after they are received, or set a meeting with the assessor to understand the value.
With costs escalating across the board, Konge said the high property taxes are a hard hit on businesses in the area and rejection of the bylaw was disappointing.
"As a business owner in Yellowknife, we all know that we need to pay taxes. Personally, I don't have a problem with paying taxes but I need to get value for my taxes," said Konge. "When I look at the cost of my taxes, cost of disposing my garbage, cost of my water, I really do question whether I am getting good value for my money."
A change in zoning restrictions within the Kam Lake area could see an increase in residential property assessments, over commercial and industrial.
A bylaw adopted by council on Nov. 10 removes the size requirement for structures to be zoned as residential, in Kam Lake.
"Before, it was basically the commercial component had to be the predominant use. 'Caretaker suites' was the term that was commonly described as what would be permitted as secondary to the primary industrial or commercial use," said Jeff Humble, director of planning and development.
As a mixed-use area, dwellings are still required to have a minimum commercial space of 93-square-metres. Despite the shared space, properties are only assessed under one use and the bylaw will allow some owners to take advantage of the lower tax rate for residential
dwellings.
The change was made in response to various meetings with Kam Lake residents and business owners, and Humble said more changes are on the way.
Although the tax pool could be reduced with more properties zoned as residential, Humble said in the long run it could lead to increased development in the area.
The tax mill rate for residential properties is lower than commercial and industrial properties.
"There is going to be a reduction in taxes for certain properties but we also note that the restrictions we had in place, they were established for certain reasons but we're seeing a trend in more residential development out there," said Humble.
"They may over the long run offset themselves."
