Alex Cullen says time to make renter property taxes fairer!
Yesterday (Oct. 2, 2014) I called for fairer property taxation for Ottawa’s 115,640 renter households (nearly one-third of Ottawa’s households; half of Bay Ward’s households are renters) http://t.co/M2ZfSlCgcN.
I said that, if elected, I would push to phase-out the difference in property tax rates between multi-residential units and residential properties over 4 years.
This is an issue I have been long involved with: in 2001 I chaired the City’s Property Assessment & Property Tax Task Force, which recognized this tax inequity of higher tax rates for multi-residential rental apartment buildings and recommended phasing this out (as did the Ontario Fair Tax Commission a decade earlier). There is no justification to tax renters in apartment buildings higher than homeowners (like condos) for the same services. This matter is aggravated by the fact that, on average, renters earn half the income as homeowners(!). To add insult to injury any "new" apartment buildings (i.e. built since 2005) are taxed at the lower residential tax rate by provincial law, not by the higher multi-residential tax rate.
Following the report of the Task Force I chaired in 2001 City Council recognized this inequity and, under my pressure, made some progress in reducing this inequity. But the efffort has stalled and now, 13 years later, it is time to deal with the issue.
Currently apartment buildings with 6 or more rental units are taxed at the multi-residential tax rate which is more than 40% higher than the City’s residential property tax rate (the City’s lowest tax rate), which covers condominium units as well as single-family, duplex and other residential homes. For example, for a unit valued at $200,000, a condo owner would pay $1,929 in City property taxes, but a
renter would pay $2,870 in City property taxes (in his/her rent) for the same unit. That's a difference of $75 a month! You can go to the City of Ottawa's web site (www.ottawa.ca) and look for the City's Property Tax Estimator to verify this inequity.
By phasing out this difference in taxation over 4 years through all property tax classes (i.e. commercial, industrial, etc.) the impact on other taxpayers would be minimal. The bottom line, though, is that this historical inequity needs to be corrected as there is no justification for this, and we can do this with minimal impact on other taxpayers through phasing it out over 4 years.