Council looks at spending another $30M to ease business property tax increases
It would be 4th year of subsidies after falling values downtown led to increases elsewhere
Calgary city council could hand over another $30 million this year in order to, once again, soften the blow of property tax increases on some city businesses.
The plan being recommended by administration would target only those who will see an increase over 10 per cent this year on the municipal share of taxes. It will be calculated based on the total amount actually paid by businesses in 2019.
The plan will be brought forward at a finance committee meeting on Tuesday.
4th year of payouts
If approved, this would be the fourth year of subsidies to city businesses after the cratering of downtown property values meant those outside the core had to fill the void left by the hollowed-out skyscrapers.
"It's necessary because although the tax shift helped solve the problem in the short term, last year council spent the money that I had allocated for two years of rebates all in one year," said Calgary Mayor Naheed Nenshi on Friday.
"It was a very large rebate in one year, so even though your taxes will go down this year, you'll lose the rebate, so a lot of businesses will still see a big increase."
Downtown values increasing
Administration says the downtown towers that led to the increases for other businesses are now gaining value as the market stabilizes. That means a bit of relief for suburban properties.
It's also the reason the city is rethinking the way it hands out the tax relief this year, as those towers would receive the bulk of the money based on increased assessments, even though those same buildings had the largest tax decreases over the past four years.
The plan, combined with a recent shift that puts more of the overall tax burden on personal property owners, should lessen the blow on businesses.
Nenshi says he hopes this is the final nudge needed to help businesses through the downturn, phasing them into the "new normal" without any drastic shocks.
With files from Scott Dippel