How can you offer a property tax break to a group that doesn’t own property?
That question arose earlier this month as Coquitlam council discussed a pending $1.371 million property tax break for the city’s places of worship, residential care facilities, recreation areas, and non-profit organizations.
However, several councillors noted non-profit groups that don’t own their property tend to operate at a disadvantage. Currently, two non-profit groups might do exactly the same work but pay vastly different tax rates, explained Mayor Richard Stewart.
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“If we have the right to grant a permissive tax exemption to someone who owns their own property . . . we should have the same right to do that – to consider that – in situations where they are leasing the property,” Stewart said.
Cities are permitted to offer permissive tax exemptions for properties that are “owned or held by” a charitable organization. However, that definition does not apply to leased properties.
Given that many non-profits don’t own their own property, Coun. Trish Mandewo suggested Coquitlam lobby the province for a change in definition, “so that we can better support non-profits.”
However, that approach may not work as intended, cautioned Coun. Robert Mazzarolo.
A property owner that gets a tax break wouldn’t necessarily pass the savings down to the non-profit group, he said.
“I would want to make sure that a benefit is going to the non-profit and only the non-profit,” Mazzarolo said.
An increasing number of non-profit organizations – including affordable housing and childcare organizations – are asking for tax exemptions, according to a city staff report. If council were to offer permissive tax exemptions to non-profit affordable housing organizations, it would add up to approximately $151,348, according to a city staff report.
Escalating exemptions will mean a heavier burden on property owners, Coun. Brent Asmundson noted.
“I think the exemptions in some cases are good but I think we always have to remember that when we do this we’re adding to our tax base of our existing residents,” Asmundson said.
That tax burden is sometimes exacerbated by the provincial government, Asmundson added.
The province offers tax relief for supportive housing – often earmarked for people suffering from mental illness or addiction – by reducing the value of supportive housing properties to $2. By depriving the city of property taxes, that practise amounts to a “downloading of costs” on municipalities, Asmundson said.
There are two properties in the city classified as supportive housing by the province, according to city staff.
Exemptions
In Coquitlam there are 31 places of worship receiving the exemption. The value of those exemptions is approximately $925,000 according to city staff.
While places of worship have a statutory exemption, that tax break does not apply to a rectory, a residence, or any other building on the site not used for public worship.
The city grants a total of approximately $149,000 in property tax exemptions to non-profit organizations including the Royal Canadian Legion, Immaculate Heart Early Childhood Education Centre, Colony Farm Community Gardens, Hickey Sport Court and the YMCA.
There are seven residential care facilities in Coquitlam receiving permissive tax emptions that add up to about $85,000. The tax break applies to care facilities funded by provincial grants issued between 1947 and 1974 that are owned and run by non-profit organizations. These care facilities receive a statutory exemption.
Coquitlam conservation lands owned by the Nature Trust and, in some cases, leased to Metro Vancouver, are exempt from property taxes. Those exemptions are valued at $212,000.
Coquitlam council is required to approve a four-year permissive tax bylaw before Oct. 31.
