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2020 Municipal Taxes: Council Shifts Burden To Residential Rate Payers

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  • 2020 Municipal Taxes: Council Shifts Burden To Residential Rate Payers

    Ohh, how I have longed to be that elusive (if not mythical) 'Average Homeowner' Edmonton City Council refers to each year when the annual levy is finalized and they announce that 'Average Homeowner' can expect to see just another $5 - 10 over what their levy was the previous year.

    When I heard some blurb about council preparing to vote on a REDUCTION for 2020, I thought, 'sure, that'll be the day. At BEST they'll just push the taxes waived this year forward to next year at compound rates.'

    Well, I was wrong. Council managed to trump my most skeptical assessment of what we'd see regarding residential property taxes this year.

    .
    Edmonton city council shifts tax break from homeowners to business
    By Phil Heidenreich
    Global News 2020.04.29

    Excerpts:

    Edmonton homeowners will see their property taxes go up while businesses will get a break on theirs as the result of a vote at a city council meeting on Wednesday.

    Councillors voted 9-4 in favour of raising residential property taxes to 2.5 per cent and freezing property taxes for non-residential ratepayers. The justification for raising taxes on homeowners was to help out struggling businesses.

    Councillors Aaron Paquette, Mike Nickel, Andrew Knack and Moe Banga voted against the tax changes.

    “Each property owner will experience a unique tax change based on how their assessment value changes compared to the overall assessment change for the tax class. Generally, about half of property owners will see higher increases, while the other half will see lower increases or even decreases.”

    At a news conference Wednesday night, Mayor Don Iveson emphasized that the average homeowner will not be paying more even though the municipal portion of their property tax increased and that it was important to give a break to business.

    .
    So.

    Council is only extending tax relief to SMALL business, right ?

    .

  • #2
    for what it’s worth i would guess that the vast majority of the commercial taxes paid are indeed from small business. even if the owners are pension funds or reits or other large business entities, the vast majority of the tenants actually occupying the space in those buildings are small business tenants and that’s who actually pays the taxes or benefits from their being lower. it also needs to be recognized that the city doesn’t have much legal room to manoeuvre here. by law the city cannot budget for a deficit and if they do incur an unplanned deficit they are legally obligated to pay it off before the end of the immediately following fiscal year.
    "If you did not want much, there was plenty." Harper Lee

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    • #3
      Originally posted by kcantor View Post
      the vast majority of the tenants actually occupying the space in those buildings are small business tenants and that’s who actually pays the taxes or benefits from their being lower.
      .
      Oh?

      Let's say I am a landlord. Suppose I own multiple bay complexes and business condos throughout the city.

      Let's say you operate a retail, professional services or industrial business from premises that you rent.
      .
      - Do YOU receive a property tax notice? Nope, I do.
      - Do YOU benefit if the city reduces property taxes? Nope, I do.
      - Do I pass along to YOU the benefit of a reduction in my property taxes - Oh, you bet ! (Wink, wink ...)

      Ditto for apartment dwellers, no ?

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      • #4
        Originally posted by mseaver View Post
        .
        Oh?

        Let's say I am a landlord. Suppose I own multiple bay complexes and business condos throughout the city.

        Let's say you operate a retail, professional services or industrial business from premises that you rent.
        .
        - Do YOU receive a property tax notice? Nope, I do.
        - Do YOU benefit if the city reduces property taxes? Nope, I do.
        - Do I pass along to YOU the benefit of a reduction in my property taxes - Oh, you bet ! (Wink, wink ...)

        Ditto for apartment dwellers, no ?
        guess what? the owner gets the notice. under a commercial lease, those costs are billed to the tenants. if they're equal to $4.00 psf, that's what the tenant pays the landlord. if they're equal to $3,80 psf, that's what the tenant pays the landlord. the landlord doesn't keep the difference in the same way that in those years the taxes go up from $4.00 to $4.20 the landlord doesn't pay that either, he charges it to the tenant. so yes, wink wink, as landlord you pass along the reduction to your tenants.

        it's not ditto for apartment dwellers for two reasons. number one, small businesses don't rent apartments. number two, apartments aren't rented on a net basis the way commercial leases are. apartment rents are gross rents where everything - including taxes - is typically included in that total and the landlord pays them whatever they are. I say typically because it's common for apartment landlords not to include utilities and the tenant would pay them and be responsible for increases and benefit from reductions in the same manner as commercial tenants and property taxes.

        if you want a copy of typical commercial lease so you can see how that works, i would be happy to send you one.
        "If you did not want much, there was plenty." Harper Lee

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        • #5
          Really liking this Councillor Mike Nickle guy slamming the city and colleagues for raising taxes on people. Did you see that cartoon of Councillor Andrew Knack tossing money into a fire?

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          • #6
            Originally posted by mseaver View Post
            .
            Oh?

            Let's say I am a landlord. Suppose I own multiple bay complexes and business condos throughout the city.

            Let's say you operate a retail, professional services or industrial business from premises that you rent.
            .
            - Do YOU receive a property tax notice? Nope, I do.
            - Do YOU benefit if the city reduces property taxes? Nope, I do.
            - Do I pass along to YOU the benefit of a reduction in my property taxes - Oh, you bet ! (Wink, wink ...)

            Ditto for apartment dwellers, no ?
            Ken already mostly laid it out for you, but see here: https://en.wikipedia.org/wiki/Net_lease

            Most leases are triple net. So yes, the tenant is more or less directly paying the property tax. The same cannot be said for almost all residential leases.

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            • #7
              So the province was about to give me a break on the education portion of my property taxes and the city of Edmonton took it away? For what grandiose project now?

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              • #8
                Is any of this tax hike going to pay to take the traffic lights off of Terwillegar Drive?

                Comment


                • #9
                  There is no plan to remove traffic lights from terwillegar drive. the plan to turn terwillegar drive into a 'light-free' freeway was killed with fire, in favour of an expressway. Think current state yellowhead, minus the few interchanges they've built. 3 - 4 lanes in each direction, perhaps a bus lane?

                  It's really just a poor idea, and should stick with the plan to just turn in into a freeway, one or two interchanges at a time, instead of this waste of money, stop-gap effort, which is really all about a local politician trying to show he's a man to get stuff done, when in reality, it's the wrong solution.
                  A people that elect corrupt politicians, imposters, thieves and traitors are not victims, but accomplices.

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