Fewer property owners letting their taxes fall into arrears is a positive sign that Thunder Bay’s economy has rebounded from the recession, a city official says.
At a meeting Monday night, city council will consider what to do about dozens of properties on which taxes have been owed since 2010. The total outstanding approaches $1 million — but that is considerably less than in some past years.
A report going to Thunder Bay city council shows that, just four years ago, the city had to register 217 properties in an effort to collect almost $2.5 million in taxes. Registering properties is the start of the process that forces the house to be sold.
Council will vote Monday night whether to register tax arrears certificates against 68 properties.
Thunder Bay's revenue manager Rob Colquhoun says the number of properties and total taxes owed are on a downward trend — something he believes shows the local economy has rebounded from the recession.
"[It’s] a good indication that the city of Thunder Bay is coming out of the struggles that it has had in the past, and is becoming healthier and healthier," he said.
Colquhoun noted, even if council begins the process of forced sales, most of the nearly six-dozen properties in tax arrears will not be sold. He said history has shown that, once the city gets serious about collecting, property owners usually pay up.
Forcing a sale
Properties are listed to be registered for tax arrears certificates if they have more than 100 dollars in back taxes owing on them for more than three years.
Of the 68 properties in question, 60 are residential properties and eight are commercial or industrial. Property tax arrears on the list range from $494 to $141,422.
If council approves the list, tax arrears certificates are issued on the properties.
Property owners then have a year to pay a cancellation price, which is the total of all arrears, plus all current property taxes, penalties and interest.
If that bill is not paid, that property then goes on the market. The minimum bid on the house is the amount of property tax owing. Theoretically, someone could buy a house for $494, but Colquhoun said that never happens.
"There's always somebody who bids more than the minimum," he said.
"I've seen deals where people have got properties for substantially less than the assessed value."
Properties on this list — if their tax arrears are not settled — will go to market in 2015.