Scrap interest on property tax arrears, committee says
A group of concerned citizens has developed a list of options on how to help people, especially those living in poverty, pay their back taxes.
The report will be delivered to council Monday night.
The informal committee, which met through the summer and fall, suggests:
- Early intervention
- Establishment of a community tax assistance program
- Changing the due date for tax payments
- A tax relief program
- The broadening of the parameters of the tax repayment program and stoppage of interest and penalties
The committee originally appeared before council July 22. Council agreed that a four-month moratorium be placed on the registration of new tax liens on properties so the committee could study the issue and make a report to council.
At the time, the city was owed approximately $45 million in back taxes. At least 95 per cent of the people do pay their taxes on time, the city says.
Angela Fitzpatrick, a committee member whose taxes are in arrears, said interest and penalties make it difficult to keep up with her taxes.
She said the possibility of losing her home in a tax sale is “frightening.”
“I pay all my [other] bills on time and because I cannot find work with enough hours I am falling further behind on my tax bill and unable to keep up because of the penalty and interest,” Fitzpatrick said.
The city charges 1.25 per cent interest per month (15 per cent annualized) after the first day of default.
The committee says the rate is much too high. The committee is recommending eliminating interest as a means to help those most in need.
“Taxpayers encountering cash flow problems are encouraged to seek alternate lower cost financing through options such as their financial institution,” the city states on its website. “Where property tax arrears remain an issue, a maximum five-year payment plan option is available to taxpayers.”