Owners of a few incorrectly assessed for-profit personal care home properties can breath a bit easier.
On Thursday, Prince Albert city council voted against applying new tax assessment standards for 2017, which in some cases, would have resulted in tax increases of nearly 200 per cent. Instead, city council will bring in a new fee structure in 2018.
The original assessment errors were the result of taxing for-profit personal care homes as residential properties instead of commercial. Mayor Greg Dionne said they were hesitant to apply the new standard this year because of the strain it would have put on the businesses in question.
“When you swung them from residential to commercial, it was quite a shift and gave some of them a few shocks, so what has happened is we’ve decided not to charge them this year,” Dionne explained.
The problem first came to the attention of city council at an Oct. 10 meeting. According to a report from the city assessor, 32 properties were identified as having assessment or taxation errors. That list included apartments, multi-family dwellings and care homes that were assigned to the wrong tax bracket.
According to The Cities Act, a “business” property is one with an activity providing goods and services. Since the properties in question rent out individual rooms and have staff employed to prepare meals and manage medications, they are considered businesses.
Dionne said the city received “very few” inquires about the matter, but the people who did respond said they were struggling with the unexpected increase near the end of their fiscal year.
“They can thank us for another year of lower taxes, but we are going to correct it in 2018,” Dionne said. “Where it’s going to land, we don’t know.”
The city is unlikely to tax care homes at the full commercial level. Dionne said that tax burden would prove too much for the businesses, but taxing them at a residential rate clearly wasn’t enough.
The city plans on talking to other municipalities and the Saskatchewan Assessment Management Agency to see how they’re dealing with the issue. The decision will likely come in early 2018.
Dionne said council wants to be fair, but what that final number will look like is up for debate.
“Some of us believe it should be (assessed at) two-thirds of commercial, some three-quarters, 50 per cent, we don’t know, but we’ll decide that early into the New Year,” Dionne said. “At least now they’ll have notice the change is coming.”
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