Property tax breaks for new developments

The city is adopting a carrot and stick approach to development. It started with the carrot. Council passed its development incentives policy Monday.

The city is adopting a carrot and stick approach to development.

It started with the carrot.

Council passed its development incentives policy Monday.

It offers property tax breaks for developments that add to the city’s housing stock.

Homeowners considering building a garden suite or rental unit in their home are eligible for a $10,000 tax break.

There are much larger incentives for more ambitious developments.

The city’s offering a $50,000 tax break for building multi-family units, and $500,000 for larger rental developments.

The policy was introduced last month, but, after politicians opposed it, the vote was deferred two weeks.

The proposal was tweaked before it passed.

It now allows the tax breaks to be applied to each phase of a multi-phase development.

In the draft, taxes were to be paid in full and then reimbursed by the city. Now, they will be assessed and applied before any taxes come due.

There was also an amendment to require council to review the policy in three years.

“Council is very interested in trying to address the land issue and housing issue in Whitehorse and they’re using all the vehicles possible to meet the growing demand,” said Dennis Shewfelt, the city manager.

Administration has been directed by council to start shaping the stick as well. It wants a disincentive policy to motivate property owners to develop land.

They are looking at what other jurisdictions have done, and considering several different options, said Shewfelt.

Some the things being considered are levying fees or surcharges on vacant land.

“The city of Winnipeg actually has an incremental fee called a boarded-up building permit that’s intended to encourage repair or reuse of derelict buildings,” said Shewfelt.

They could also simply raise taxes on property owners who are holding on to vacant land.

“I’m told they do that in Watson Lake,” said Shewfelt.

There is also something called a split-rate tax system under consideration that involves taxing land and developments at different rates.

It’s something done in jurisdictions south of the border, but has never been tried in Canada, said Shewfelt.

“We’d have to work through that because it might also be in conflict with the incentives policy,” he said.

Administration is weighing the options.

The next step is to actually draft a policy.

It will most likely be a phased approach, said Shewfelt.

“Parts of it could possibly come in as early as this fall, but the tax rate changes, if there are any, would not take effect until next spring,” he said.

Contact Josh Kerr at

joshk@yukon-news.com

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