Quote:
Originally Posted by 240glt
We need to figure out a more stable method of taxation that doesn't allow for massive swings in value based on occupancy. Of course a fully leased office building is worth a lot more than an empty one on the market, but is that really the metric they should be using to determine value ? The city doesn't care if my rental property is occupied or empty, it's taxed at the same rate regardless. Maybe it's time to look at how value is determined for commercial buildings and take occupancy out of the equation
|
I think the direct occupancy factor is gone now that the business tax is gone.
The indirect occupancy impact which reflects reduced value of a property class when a large portion of properties are unoccupied is by design, and the same if let’s say 10% of condos were unoccupied the value among them would drop too. Who designed the current system? I believe it was in the 1990s under the Klein government where we switched to revenue neutral tax assessment. The intent was to not have city revenue go up automatically when assessed value increased, forcing cities to make a choice each year on their revenue needs.
That the system reacts poorly to a sectoral decline (one asset class) does create problems, but the design of the system is entirely in the hands of the provincial government.