Lethbridge Council gives first reading to property tax bylaw & potential tax deferral

“It is only on the education portion of the property tax, so they have cancelled their planned increase of the education property tax and they have allowed a deferral for non-residential customers only. That deferral would go until October 1st, but there’s nothing else.”

In a letter from Minister of Municipal Affairs Kaycee Madu, he says this will save Albertans approximately $87-million in 2020-21.

“This encourages commercial landlords to pass on the savings to their tenants through reduced or deferred payments. This will also help employers continue to manage their debts, retain their employees, and stay in business.”

Madu encouraged all municipalities in the province to consider property tax deferrals of their own.

Bylaw 6221

The city’s Bylaw 6221 is in regards to the Tax Installment Pre-Payment Plan (TIPP). It would set the rate of discount on prepayments at 0.75 per cent for the 2021 tax year, a decrease from 1.25 per cent for 2020.

TIPP allows people to pay their property taxes in 10 equal installments, earning a discount in the process.

They cited the Government of Canada’s decision to lower overnight lending rates by 1.5 per cent to 0.25 per cent.

“The reason the City is offering a rate that is higher than the rate taxpayers would receive on 120-179 day term deposits is to provide a bit of an incentive for people to remain on TIPP, given the economic environment caused by the pandemic,” reads an excerpt from the bylaw.

Bylaw 6222

This bylaw sets the rates for property taxes and supplementary property taxes. A summary of the highlights can be found here.

In December 2018, council approved the four-year operating budget which includes a 1.82 per cent increase in each of those four years.

Spearman says this means that the current proposal is for the 1.82 per cent hike in property taxes would go ahead.

The 2020 Green Acres tax levy, which funds affordable housing for seniors, would increase by 1.33 per cent.

The education requisition that goes to the provincial government would decrease by 2.33 per cent.

The city provided an example of property taxes that would be due for a home valued at $272,200.

In 2019, the homeowner would have had to pay $3,074.79 in residential property taxes. For 2020, that would increase to $3,101.80.

Bylaw 6227

Bylaw 6227 would give an additional 92-day deferral of tax levies to be paid without any penalties being applied.

“Businesses that are struggling that have no cash flow now, hopefully, they will have cash flow again by the fall and could then pay their taxes without penalty,” says Spearman.

Changes are as follows:

There will be no penalties if you do not pay by the 1st of September
- If you do not pay by October 1st, you will be charged a three per cent penalty. An additional four per cent penalty will be applied if you do not pay by November 1st and five per cent on December 1st
There will be no penalties if you do not pay supplementary taxes by November 1st
- If you do not pay your supplementary taxes by December 1st, you will be charged an extra five per cent

Next Steps

Bylaws 6221 and 6222 will come back for a second and third reading at the special May 11 city council meeting.

That date was chosen because city council needs to wait and see what mill rates Lethbridge County will set first.

Assuming these are approved on May 11, property tax notices will be mailed out by May 27.

As for Bylaw 6227, that should come back at the next regular meeting on May fourth.

by David Opinko

Lethbridge Council gives first reading to property tax bylaw & potential tax deferral

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