Non-Residential Property Tax Changes
For 2021, the vacant non-residential sub class rate has been set at 200% or double the typical Non-Residential rate. The Small Business Property sub class rate has been set at 10% below the typical Non-Residential Rate.
How might this look for me? Some examples based on 2020 numbers.
In 2020, the singular Non-Residential rate was 0.0130067. A property tax bill on a Non-Residential property assessed at $250,000 would be $3251.67.
With a vacant Non Residential rate at 200% (0.0260134), the same tax bill would be $6,503.35
With a small business property Non Residential rate at 90% (0.01170603), the same tax bill would be $2,926.51.
Subclasses of Non-Residential Property
As authorized by the Municipal Government Act, Council can choose to set criteria by which Non-Residential (Class 2) properties will be taxed within different sub-classes:
- Small Business Property
- Vacant Non-Residential Property
- Other Non-Residential
Starting in 2021, there will be changes to the taxation of the following subclasses of non-residential properties:
- Small Business Property – may receive a 25% reduction below Other Non-Residential*
- Vacant Non-Residential Property – may receive a 200% increase above Other Non-Residential*
* If you qualify as or are determined to be such under the criterion
Qualifying as a Small Business:
To ensure that a property is in the subclass, the property must be owned or leased by a business that:
- held a valid Town of Nanton business licence attached to the property at December 31 of the preceding tax year; and
- had no more than ten (10) full-time employees across Canada on December 31 of the preceding tax year.
Determining if a Property is Vacant:
Properties that find themselves in this sub-class will have met all of the following criteria. They will be property owned or leased by a business or person that:
- is located within the C1, C2 or IN Land Use Districts as defined by Town of Nanton Land Use Bylaw 1246/13, as amended; and
- was assessed at or above the median assessed value for all Non-Residential (Class 2) properties within the Town of Nanton assessment roll in the preceding tax year; and
- was subject to non-residential taxation in the two preceding tax years; and
- had no valid municipal or regional business licence attached to the property in the two preceding tax years; and
- had not been connected to the water or sewer utilities or used under 10m3 metered water and sewer in the two preceding tax years; and
- is not currently assessed as an approved residential or other permitted use that does not require a business licence; and
- has had no development permit approved in the preceding two tax years by the municipal subdivision and development authority.
One of the key recommendations of the recent Business Revitalization and Expansion (BR&E) report was that the Town urgently address the economic stagnation that comes from vacant non-residential properties that sit without operating businesses behind their doors year after year. In addition, by token of the same mechanisms being required to introduce it, Council is keen to give itself the ability to give small business properties a tax break in the years ahead given the challenges facing the Alberta economy.
It is necessary to provide notice of these actions now to provide reasonable notice to those property owners who may be impacted by new Non-Residential tax rates in 2021.
These criteria ensure, as reasonably as possible, that this tax rate will target genuinely vacant non-residential properties of long-standing and offers a quick route for the owner to be placed in either the Other or Small Business Property sub-classes instead. Council’s goal is to see properly licensed businesses operating on these properties.
The Town appreciates that there may be some interest and concern that the Vacant Non-Commercial Property Sub-Class tax rate could yield revenue from the unfortunate perceived circumstances of some property owners. Bylaw 1339 constrains what can be done with any extra revenue generated from that rate by providing Council with the following options or limitations:
- Transfer to the ‘Public Realm Improvement Reserve Fund’ for the purpose of funding amenities, infrastructure and other improvements that tangibly and visibly improve the physical condition, appearance and function of the public realm and provide a public benefit to the community overall;
- Transfer to the Town of Nanton “Nanton Arena Multiplex Renewal Reserve” for the purpose of the renovation or renewal of the municipal ice arena, swimming pool, curling rink and associated spaces and land.
- Use the revenue to fund an annual discretionary ‘Nanton commercial façade improvement grant’ program to provide up to 50 per cent of the costs of a commercial property renewing or upgrading the aesthetic appearance of its façade.
- Use the revenue to help fund current year Town projects that improve the availability of serviced industrial land in Nanton.
It is hoped that the business community itself will weigh in on what should be done with any revenue generated within these options.
If any condition of the statutory declaration signed in accordance with the Bylaw is contravened, or if a false or misleading statement or information is provided on the statutory declaration by the persons registered on titles, the said persons:
- Will be liable to pay the tax rate approved for their property’s appropriate sub-class for the current taxation year.
- Will be guilty of an offense and shall be liable for a minimum specified penalty of $5,000.