Making development less taxing

Whitehorse is considering tax incentives to spur development in the city. At Monday's council meeting, city planners presented a plan, which includes a five-year $10,000 tax grant for people building garden or living suites.

Whitehorse is considering tax incentives to spur development in the city.

At Monday’s council meeting, city planners presented a plan, which includes a five-year $10,000 tax grant for people building garden or living suites.

But it’s not enough of an incentive for some people to start building.

“The tax break is not enough” said Remax realtor Terrance Tait. “If you go to the city and find out what the requirements are to get a legal suite in your house it’s absolutely ridiculous.”

For Tait, the cost to turn his basement suite into a rental unit was prohibitive.

“You need to put in an HRV system which is $7,000, and that’s before any of the other things,” he said. “I’m not going to spend $10,000 to legalize my suite just to rent it out.”

New multifamily or mixed-use commercial downtown developments will be eligible for a 10-year $50,000 grant.

And any developer building on an abandoned downtown lot, or doing major renovations to a derelict building will be able to recoup $500,000 in property taxes over10 years. To qualify, a developer would have to spend at least $1,000,000 on construction costs.

“Incentives have been suggested by the public and the Whitehorse Chamber of Commerce to spur on private development,” said city planning and development manager Mike Gau.

All of this is an effort to “help relieve the housing crunch,” he said.

The city decided to go with these tax incentives to avoid any loss in revenue, he said.

There had been suggestions the city should waive tipping fees at the dump, or lower permit fees, but doing that would cut into the budget, he said.

“It can get very complicated,” said Gau. “Some of the things that have been suggested would result in a decrease in revenue and there would be an impact.”

The tax grants only apply to new developments, while taxes are still collected on land.

“We’re not collecting these taxes now and, in fact, this should spur economic development to increase taxes once the incentive period expires,” said Gau. “We’ve looked at the tax-incentive route to provide the incentive desired without impacting the taxpayers.”

City planners hope these incentives will spur some private development.

“Ten thousand dollars to assist in the development of a living suite, for example, may make the difference for a homeowner to add that unit,” he said.

While the Whitehorse Chamber of Commerce is supportive of the new incentives, it’s skeptical how much of an impact they will have.

“It’s a good first step but it doesn’t go far enough,” said chamber president Rick Karp. “More needs to be done to get the rental market back into the position that it should be.”

The formula for tax incentives should be expanded to include waivers or more downtown development, he said

“We need to go further, and we need to do it quickly,” said Karp.

Contact Josh Kerr at

joshk@yukon-news.com