South Glengarry takes $30,000 bath on Glen Walter townhouse land sale

Three lots have been sold on Glen Walter Park Road in Glen Walter, Ont., seen here in a February 2019, file photo. Some members of South Glengarry council are irked that the municipality will take a $30,000 bath because HST wasn't charged in addition to the sale price on the three lots. The deal closes today. (Newswatch Group/Bill Kingston, File)

LANCASTER – South Glengarry council found out in the 11th hour that it’s going to lose out on $30,000 through the sale of three development lots in Glen Walter.

The three lots are on Glen Walter Park Road in front of the fire station and are being sold to Grant Marion Construction for $70,000 each to build townhouses. The agreement on the sale happened in September and the buyer and seller agreed to all conditions. The deal closes today (July 18).

The lots were appraised at $70,000.

But a late-hour paperwork problem surfaced as there’s been a disagreement between township accountants and lawyers about whether the Harmonized Sales Tax (HST) was supposed to be included in the price or in addition. The sale has it included.

“We’re losing 13 per cent on these lots as far as I’m concerned,” Deputy Mayor Lyle Warden remarked during Monday’s council meeting. “This is a business that’s a developer (and) has an HST number. HST should be in addition to. It’s frustrating because we’re losing $30,000.”

When the township has to remit the HST to the government, it will essentially be giving away about $8,000 per lot.

All others on council, with the exception of Mayor Frank Prevost, agreed with Warden’s assessment. Council did agree to the sale and passed the bylaw to close the transaction.

“In my opinion, we lost $30,000 that I feel the developer would have paid if it was clearly stated in the agreement. Going forward, that has to be the practice, of this municipality. If we sell a lot (HST) should be applicable (in addition to the price),” Warden told Cornwall Newswatch after the public meeting.

Warden, a real estate agent, believes that HST should have been in addition to the sale price, especially on the first sale of development land. “It’s like a brand new house. If you buy the house, first time you buy the house, HST has to paid.” But he admits it’s a “grey area.” Admitting his bias and that he couldn’t do it himself because of a conflict of interest, Warden believes the township should have used a realtor to sell the lots instead of doing the work itself.

Council met behind closed doors for real estate negotiations on a fourth lot – considered more valuable as it’s closest to County Road 2 with waterfront views. It’s appraised at $200,000. While he couldn’t speak to specifics, Warden indicated that the HST has been addressed with this particular lot. A real estate agent was hired to sell this particular lot.

Clerk Kelli Campeau says the offer was not accepted at Monday night’s council meeting and they are “still in negotiations.” The township is now making a counter offer.