Simcoe County will consider lowering its tax burden on multi-residential properties in an effort to stimulate the construction of more affordable housing.
In a report examining how it spreads out its $150-million tax levy among different property tax groups – such as residential, commercial and farmland – county finance staff noted that its multi-residential rate is higher than average among not only neighbouring municipalities but in Ontario.
The discrepancy becomes even more severe when the county examined newer multi-residential developments. The county was third highest in a group of 11 municipalities, which included Barrie, Orillia, York Region. Kawartha Lakes and Dufferin County were the only two that taxed this group higher than the county.
“We’re expecting this class (multi-residential) to attract money,” said Peter Frise, the director of corporate and client services with Municipal Tax Equity Consultants, who added the province is examining requiring municipalities to lower the multi-residential tax ratio to that of the residential class.
“It may be preferable to move (it) down under your own power rather than later to be forced down,” Frise forewarned.
“The class isn’t huge and reducing the ratio isn’t overly expensive,” he said, adding the rate cut would mean a 0.08 per cent increase on the residential rate.
For that move, however, there’s a lot of payoff, starting with the signals it sends to developers looking to build multi-residential and opening them to building at more affordable prices, he explained.
County treasurer Lealand Sibbick added the Simcoe County Housing Corporation’s stock is subject to taxation and lowering the rate to the same as the general residential class will ease that liability, as well as demands for grants and waivers from developers wanting to include affordable units in their projects.
The last time the county reduced its multi-residential ratio was 2005. At that time, the county also reduced its industrial rate to make it competitive and attract investment particularly along Highway 400.
Frise suggested a modest drop in that class’ rate could stimulate investment even further.
“The timing is right now, before the growth occurs. A modest change can be a nice arrow in the economic development officer’s quiver, sending a nice business-friendly signal,” he said.
County councillors will discuss and approve tax policies in March.
The county is also seeking input from its agricultural relations committee on the tax burden facing farmers as their land values rise.
