District of Houston council members have begun thinking of changes they might make to how organizations within the community are given property tax exemptions.
Places of public worship, provincial and municipal lands, public libraries, lands held in trust for Indigenous bands, cemeteries, schools and hospitals are exempt from property taxes through provincial legislation but local governments can decide on taxation when it comes to charitable and non-profit organizations.
Reducing the number of organizations who have exemptions would then increase the dollar value of taxes collected from properties they own and that would then allow council to reduce overall tax rates, finance director Jennifer Larson noted in a comprehensive six-page memo.
Conversely, the more properties that are exempted, the more this amount of foregone tax is spread over actual taxpayers.
Larson said the dollar value of property tax exemptions now stands at $77,000, equivalent to 1.5 per cent of property tax collection revenue.
Council must make up its mind regarding exemptions by the end of October so that they can be included in 2025 taxation rolls.
They’ll start by revising the current policy in May and the District will then begin informing organizations of he need to submit new applications by mid July.
Council will then consider staff recommendations in early fall and pass a required bylaw in mid-October.
The District of Houston’s current exemption policy adopted in 2016 is “to support organizations within the community which further council’s objectives of enhancing quality of life (economic, social, cultural) and deliver services economically”.
Larson noted that other municipalities have started reducing exemptions to increase the amount of revenue they can collect.
That move is being applied to properties attached to ones which are exempt because of provincial legislation or by tightening qualification criteria.
“Council may also consider reducing the amount of the exemption — for example instead of exemption 100 per cent of the taxable assessed value the could choose to exempt only a portion,” Larson said.
In comments from council, councillor Tom Stringfellow said the time might have come to consider trimming exemptions to gain more revenue given that existing taxpayers are already stretched.
“It’s unfortunate but we’re getting pinched pretty good,” he said.
Councillor Jonathan van Barneveld noted that Fort St. John is reducing exemptions by stages.
Councillor Rebecca Hougen advised caution in how council might proceed because of the effect on volunteer organizations who provide care and assistance to vulnerable members of the community.
She said exemptions are “the very least” the District can offer.