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More Hamiltonians struggling to pay property taxes

A record number of properties are being slapped with liens because Hamilton home and business owners can't pay their taxes.

Taxpayers are struggling, says the city's Director of Taxation

More Hamilton properties than ever are being slapped with liens because people can't pay their taxes. (iStock)

A record number of properties are being slapped with liens because Hamilton home and business owners can't pay their taxes.

By the end of 2013, the city will have registered more than 500 properties after warning owners that time is up to pay their overdue taxes.

That’s the highest number in at least 10 years, said Larry Friday, the city’s director of taxation.

“It’s an indicator of the economic health of the municipality if your taxpayers are struggling,” he said.

The number of taxpayers behind on their taxes has steadily increased since the recession began in 2008.

Properties registered with tax liens

2008: 323

2009: 354

2010: 368

2011: 377

2012: 400

2013 (projected): 500+

There were 323 properties registered with tax liens in 2008. That number increased to 368 in 2010 and 400 last year. This year, there will be at least 100 more, Friday said.

When a property owner's taxes are three years overdue, the city sends a letter — 1,091 of them in 2008 and 1,840 in 2012. This year, the city sent nearly 2,000 letters.

Friday blames the deep impact of the recession. As people lose jobs and companies struggle with cash flow problems, tax bills take lower priority, he said.

“If I don’t pay my hydro bill and they turn off the hydro, that’s critical because I can’t function and my business can’t function,” Friday said. “With taxes, they think ‘I’ve got three years before they can bother me.’

'The back burner is on fire'

It’s put on the back burner, he said, and “before long, the back burner is on fire.”

Taxes in arrears

2008: $60,089,084

2009: $64,695,062

2010: $71,159,766

2011: $77,379,704

2012: $74,379,704

Hamilton has a bigger problem with tax arrears than cities such as London, Ottawa, Toronto and Barrie.

Unpaid taxes accounted for 8.1 per cent of the city’s total levy last year, Friday said, totaling $74,060,934.

That number has crept up since 2008, when delinquent taxpayers owed $60,089,084. It peaked at $77 million in 2011, or 8.6 per cent of the total tax levy.

The city has healthy reserves, so it doesn’t create a cash flow problem, Friday said. But he hopes 2013’s numbers are lower.

Increase in outstanding industrial taxes

Even more troubling: industry accounted for 8.78 per cent of Hamilton’s unpaid taxes in 2008. That’s steadily increased year over year, and in 2012, industry accounted for one-fifth of the unpaid taxes in Hamilton.

A large percentage of that came from National Steel Car, which was successfully appealing its assessment, Friday said. But it’s still troubling.

Properties with outstanding taxes

2008:

  • Vacant land: 5.21 per cent
  • Farm/managed forest: 3.57
  • Residential: 63.13
  • Commercial: 18.18
  • Industrial: 8.78
  • Other: 1.13

2012:

  • Vacant land: 3.07 per cent
  • Farm/managed forest: 2.58
  • Residential: 59.43
  • Commercial: 13.14
  • Industrial: 20.35
  • Other: 1.43

“There is still a little bit of trending upwards,” he said. “I don’t know if it’s just getting tougher out there for industry.”

The numbers don’t surprise Renee Wetselaar, a social planner who specializes in housing with the Social Planning and Research Council.

She attributes much of it to the recession and the industrial downturn.

“A lot of the homeowners unable to maintain their homes in the last little while have been involved in manufacturing,” she said.

She concurs that taxes take a back seat for people struggling to pay for food and hydro. Many Hamiltonians are precariously employed and a few pay cheques away from being homeless, she said.

Most find ways to pay

When the city sends out letters, Friday said, about a quarter of the recipients pay up. Another 25 per cent call and explain the circumstances — that they lost their jobs, or have been off work, or have had other extenuating circumstances.

About half just ignore the letter, and the city registers those properties for tax liens.

Usually, mortgage companies or other parties step in. Few properties are actually sold in city tax sales. There were six in 2012 and three the year before.

Next year, Friday would like fewer taxpayers to be in this situation.

“We’re hoping that when we get into 2014 and we issue letters that the trend starts to go down,” he said. “That’s what I’m hoping.”

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