CORNWALL – The city’s chief financial officer is asking the budget committee to take a look at the “pressures” of taxation of apartment buildings.
Maureen Adams shared examples of various city apartment buildings with wild variations in the amount of taxes they pay.
Based on the taxation class, apartment buildings over six units pay roughly 2.3 times the rate of taxes of a regular family home.
The pressure is seen a lot in smaller apartment buildings. For example, a six-plex and an eight-plex – of almost of equal value – pay $5,233 and $11,566 a year respectively, simply because of the two extra units.
The Cotton Mill Lofts condos pay roughly $2,504 a year in taxes, while an apartment at the Knox City Center pays nearly double – $5,896 – based on the number of apartment units.
Adams is concerned that if the city doesn’t address the multi-residential tax rate, places like Knox City Center could convert to condos, and the multi-residential rate could be a “driver” of those decisions.
“Many municipalities have introduced a new multi-residential class as an encouragement,” Adams said. “If you wanted to make some small changes (reductions to the rate) … it could be part of a longer-term plan (to change the tax ratio),” Adams said.
The number of units and what is classed as multi-residential are dictated by the Ontario government. The city can’t change the class definition but it could introduce a new tax class. However, it would only apply to new construction and wouldn’t be retroactive to older buildings.
“It can’t be done in this budget,” Mayor Leslie O’Shaughnessy said, suggesting it could be addressed in 2017.
Budget chairwoman Bernadette Clement asked if the city is getting pressure from multi-residential owners.
“Yes, we have had some complaints. It’s unfortunate that our six and eight-plexs are in the same category as our 40 unit apartment buildings,” Adams answered.
After the discussion, no decision was made on how the city would proceed with addressing the taxes for multi-residential buildings.