Exempting_seasonal_residents

Jeff Green | Jul 28, 2005

Feature article July 28, 2005

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What about exempting seasonal residents from education taxes?

by Jeff Green

Last week I wrote a column that spent some time considering the relationship between waterfront ratepayers and municipalities, specifically over the contentious issue of taxation in the era of increased market value assessment.

The column concluded by saying that relationships may be strained considerably next year as the escalating waterfront property market of the past two years translates into further increases in taxation for waterfront ratepayers.

This brings some urgency to efforts by WRAFT (The Waterfront Ratepayers Association for Fair Taxation) to convince the provincial government to cap assessment increases in a given year, or to establish a new category for taxation, waterfront residential, which would pay a lower rate of taxation than do residential taxpayers.

While these proposals have merit, and WRAFT makes a very credible argument that the burden of taxation has been unfairly shifted onto waterfront ratepayers because of the exploding value of waterfront properties relative to other properties, rural municipalities will likely oppose any attempt by the Province to erode their assessment base.

As has been pointed out again and again, rural municipalities have been undergoing a financial crunch since the downloading of services from the province that took place in the late 90s. There is limited commercial/ industrial assessment and virtually no growth in that area each year. As a result, even though municipal services dont compare at all with those in urban centres, the tax rate is much higher. The tax rate in Toronto is about $1,000 for every $100,000 of assessment, whereas it is over $1,500 in Central Frontenac.

So any move by the Province that would lead rural municipalities to be forced to increase the tax rate will lead to legitimate outrage by rural politicians, who have already been frustrated by the burden placed on the shoulders of all rural ratepayers.

Thats where Education taxes come in. They are about 21% of property taxes, and all of the money is transferred out of municipalities to the Province of Ontario. The majority of waterfront properties in rural Ontario are seasonal properties, so the owners are paying education taxes on their properties in the city as well as their vacation properties. If, for example, education taxes could only be levied once against a family, say on their property of greatest value, it would mean a considerable savings for the owners of seasonal properties without costing rural municipalities any money.

Another means of addressing the difficulties faced by low income waterfront property owners would be to boost the level of rebate they receive through their Ontario tax credits at income tax time.

Both of the above mentioned measures would cut property taxes from waterfront ratepayers without costing municipal governments anything. They would, however, cost the Provincial government, which is also facing a deficit.

The problem is, ultimately, that while no one seems to dispute that waterfront ratepayers are being overtaxed, no government wants to forego any revenue, and transferring the burden to another group or another form of taxation is not exactly desirable either.

Maybe thats why WRAFT has found little success with the Finance Department at Queens Park. JG