Calgarians struggling to make property tax payments due to COVID-19 and a weak economy will get a second break from the city.
In April, as part of a COVID-19 relief package, Calgary allowed the deferral of property tax payments – without penalty – until Sept. 30. Typically, city property taxes are due June 30.
After a decision in day two of Calgary’s combined meeting of council, those who are still unable to make their property tax payments will get further relief.
Council approved the reduction of the city’s late payment penalty on property taxes -both residential and non-residential – from seven per cent to 3.5 per cent.
“This could make the difference of whether businesses stay open or closed and keep folks employed and also give a bit of a breathing room for many residents throughout our city,” said Ward 5 Coun. George Chahal.
“Whatever we can do to support Calgarians, we need to do so.”
City doesn’t want to be a lender
Mayor Naheed Nenshi raised the concern of the city taking on the role of a lender. He wanted to guard against borrowing rates for taxpayers that are lower than what’s out on the market.
“What’s the point at which people start using their property taxes as a source of cash flow, and we become the bank? What percentage should we never want to go below,” Mayor Nenshi asked administration.
The proposed 3.5 per cent penalty is just slightly above interest rates out the on the open market, administration said.
There are roughly 530,000 property tax accounts with the City of Calgary. Administration said they’re working with property owners to come up with solutions during the ongoing pandemic.
At the end of August, two thirds of residential and 40 per cent of non-residential, lump sum property taxes had been paid. Approximately $10 million had been budgeted for late payment penalties for 2020, the city said.
Deferral of property taxes has cost the city $1.5 million in investment income, they said.