In a closely split vote, Sturgeon County councillors agreed to a proposal last week that would dramatically increase taxes on vacant residential lots.
The move is Coun. Tom Flynn’s brainchild and could add $158,000 to county coffers next year.
During budget discussions on Friday, council voted four to three to support Flynn’s proposal, which would eliminate an exemption the properties currently enjoy.
Flynn was joined by Coun. Karen Shaw, Coun. Ken McGillis and Coun. Joe Milligan in support of the move, while Mayor Don Rigney, Coun. Don McGeachy and Coun. Dave Kluthe were opposed.
The change won’t be official until the full budget is approved, but council gave administration direction to prepare a budget for first reading based on that change.
Including this proposal, the budget currently projects a tax increase of 6.2 per cent.
The change would eliminate a special tax status the county has given to vacant residential lots over the past few years.
The county, along with many other municipalities, has traditionally charged higher rates on vacant land as an incentive to encourage developers to build.
Sturgeon created a special exemption that leaves vacant lots taxed at a lower rate, similar to a standard residential rate, for the first two years after subdivision.
After those two years are up, the lot is taxed at the standard vacant property mill rate, which is slightly higher.
Flynn’s proposal would remove the two-year grace period and start charging lots at the vacant rate right after subdivision and would also further increase that vacant property rate.
In one example presented to council, a vacant residential lot in Riverstone Point valued at $318,170 would pay $994.60 under the current two-year exemption.
With the exemption removed, that total would grow to $1,488, then climb further to $1,806.25 with an increase to the vacant tax rate.
If the county doesn’t increase the vacant residential rate, it will only bring in an extra $39,000.
Flynn said he is still open to more number crunching, but thought it only fair vacant lots are taxed more.
“We may have to look at just exactly what that rate is, but I thought it would be fair to treat them as equitable within the county.”
He said this year’s budget is tight and he needed to look for ways to cut costs as well as raise revenues.
In council chambers Friday he said many of the county’s services are provided to the lots whether there is someone living there or not, including snowplows and road maintenance.
Mayor Don Rigney, who remains opposed to the idea, argued against that claim.
“To my mind that is entirely uncalled for in a recession year,” he said. “If they are vacant residential lots, those lots are essentially not demanding any services.”
Rigney said the lower rates were brought in to encourage development and he is worried this might have the opposite effect.
He said developers want to sell.
“I think that what we are doing will be viewed as a hardship rather than an incentive to sell. There is a far bigger prize by selling them.”
Flynn said the higher rates will encourage developers to sell quickly because holding out will cost them more money over time.
“We are not in a position where we can afford to be giving people a break on the taxes,” he said. “I wonder from time to time and the situation can be different in all of them, whether they are holding out for the highest dollar in every lot.”
The full county budget is set to go before council on Dec. 14.
