The number of vacant lots in St. Albert make up such a small percentage of the overall tax base that taxing them at a higher rate would have a negligible effect on overall city revenues, the standing committee on finance (SCOF) heard Monday night.
The report came on the heels of a budget motion last year, withdrawn at the time but referred to SCOF for discussion, that vacant residential land be taxed at a 50 per cent higher rate than developed properties.
According to Greg Dahlen, the city's director of assessment and taxation services, no other municipality of the 20 surveyed in Alberta have a separate tax rate for undeveloped residential or industrial land.
Some municipalities do tax vacant multi-family properties at a higher rate because of their quasi-commercial nature as apartments, Dahlen said.
While the Municipal Government Act (MGA) does give municipalities the ability to create separate sub-groups that can be taxed, Dahlen said there are so few vacant lots in St. Albert that using a higher tax rate – which could be considered a mechanism to spur development – would have little effect on the city's coffers.
"If we create the subclass, we are not creating new tax revenue. It is only as a tax levy redistribution method," Dahlen said.
Total lots
The number of vacant lots within the city's boundaries is also relatively small, Dahlen said. In total, there are 28 vacant industrial lots, making up 2.02 per cent of the taxable assessment base, eight vacant commercial lots at a percentage of 0.70 and six vacant multi-family lots at 0.19 per cent.
"If you choose to tax one at a higher rate, it's a very low number of lots we are dealing with and it constitutes a very low percentage of our base," he said.
Some councillors agreed a higher tax on vacant lands might help spur development sooner, but the downsides included developers seeing the tax as punitive, it would not guarantee new development will occur and the inventory of lots is so small that any tax shift away from single-family homes would negligible.
"It provides sort of an idea of where the priority lies, and if you tax non-developed or vacant residential land, it's saying this is important that you do this and if you don't move it you're going to pay for it," said Coun. Wes Brodhead. "Money into coffers is nothing compared to message."
Mayor Nolan Crouse asked for more specific numbers of what a hypothetical increased tax on vacant land could mean financially.
"I don't have the information to know if I should have a motion. I'd like to know what the potential is," Crouse said.
