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Dreschel: Chopping tax rebates for Hamilton’s vacant buildings
Program offers incentive to not renovate, holding up development
http://www.thespec.com/opinion-story/733...rebates-for-hamilton-s-vacant-buildings/
Every year about 500 vacant business buildings in Hamilton receive tax rebates from the city that end up costing taxpayers about $3.3 million annually.
The program may be a sweet deal for the property owners, but chances are it's living on borrowed time.
The city is studying a number of options, including eliminating the rebates, slapping time limits on them, or phasing them out.
Why?
According to Jason Thorne, head of city planning and economic development, the program is acting as a "disincentive" for owners to fix up empty spaces and storefronts across the city, but especially in the downtown.
"There are properties that are viable for either development, redevelopment or for restoration and occupying that aren't moving because there are financial incentives in place not to move and not to change," Thorne said.
"And that's holding back the Renaissance we're having in the city."
A council-directed report on the issue is expected to be ready at the end of the month. The general issues committee will then debate it at the June 7 meeting.
Though technically the status quo is also in play, realistically it'd be nothing short of a marvel if revenue-hungry councillors don't make a move to curtail the tax breaks.
The arrangement, known as the vacant unit tax rebate program, was established by the province in 1998 as part of an overall taxation facelift that included efforts to help the owners of business properties weather tough economic times.
But in February of this year, the province finally gave supplicating municipalities the flexibility to directly eliminate or adjust the program. Council needs to submit the proposed changes to the province by July 1 in order for it to kick in for the 2018 tax year.
As it stands now, commercial and industrial property owners can apply for a 30 per cent rebate on the property tax on their vacant properties. The city receives about 500 to 550 of these requests annually, which costs the city about $2.3 million in lost revenue plus a loss of about $1 million in education taxes.
Some properties only apply for the program once; others appear to have developed a serious dependency, applying for the rebates year after year.
Perhaps surprisingly, Thorne says the review hasn't generated much pushback from those who benefit from the refunds — at least so far.
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