A better solution would be to allow a time-limited discount to allow owners to find new tenants, after which the tax returns to the normal rate.
By Nicholas Kevlahan
Published June 09, 2015
The Ontario Government is currently undertaking a review of the Municipal Act and is soliciting suggestions and feedback from Ontarians.
The single most important change the Government could make would be change Section 364 of the Act to allow cities to decide how much, if any, property tax discount to give to property owners who leave their buildings vacant.
18-28 King Street East, vacant since 2012 (RTH file photo)
The current rebate of 30 percent (35 percent for industrial property) has no time limit and is an incentive for owners to leave property vacant indefinitely instead of using their properties in economically and socially productive ways.
Vacant buildings harm the economy, reduce the social capital of neighbourhoods and make it more difficult for Ontarians to start businesses and find places to live. Vacant buildings also lower property values - and hence property taxes - in a vicious cycle.
Even worse, in Hamilton we have seen that the steep discount for shuttering a building (without a time limit) is often used by property speculators as the first step in demolishing a building, which decreases the taxes further almost to zero.
Often, in the case of heritage buildings, this amounts to demolition by neglect.
A better solution would be to allow a time-limited (say, one year) discount to allow owners to find new tenants. After that, the tax goes back to the normal rate. If the property owner is unhappy, they can sell the property to another more dynamic owner.
This sort of arrangement is what many municipal officials have told me they would like to be able to implement. Please allow them the freedom to do it!
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