Staff Report: Permissive Tax Exemptions

PERMISSIVE TAX EXEMPTIONS

RECOMMENDATION:

THAT the Town of View Royal provide property tax exemptions for the following groups: Church Halls and Church Land for __ years (to be established by Council); Community Halls for __ years (to be established by Council); and Non-Profit Organizations for __ years (to be established by Council);

AND further that bylaws be prepared for the September 16, 2014 Council Meeting.

CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:

I concur with the recommendation.

PURPOSE OF REPORT:

To advise Council of the applications received for permissive tax exemptions.

TIME CRITICAL:

BC Assessment Authority requires submission of permissive tax exemption bylaws by October 31 each year. The bylaws to provide a permissive tax exemption for 2015 must be adopted prior to October 31, 2014.

INFORMATION:

The Town has received five requests for permissive tax exemptions:

• Extreme Outreach Society
• The Salvation Army
• Anglican Synod of the Diocese of British Columbia
• The Redeemed Christian Church of God – Victory Chapel
• Strawberry Vale and District Community Club

A summary of these applications is attached to this report.

Section 224 (2)(a)(i) of the Community Charter states that a Council may exempt land or improvements, or both, that are owned or held by a charitable, philanthropic or other not for profit corporation. A portion of 305 Island Highway is currently leased by the Salvation Army. The Ministry has confirmed that the word “held” includes not only capital leases but also operating leases. As such, the Salvation Army would qualify for a permissive tax exemption under this section of the legislation for the portion of the property that they lease. It is important to note that this has been a long term lease and it is anticipated that the lease will continue into the future; however, there is the small possibility of the lease ending. In the unlikely scenario that a permissive tax exemption is given and the lease ends, the exemption would cease in the following year and could potentially result in a small benefit to the land owner. The other four applicants all own the land for which they are applying for a property tax exemption.

The Community Charter only allows Councils to grant a permissive tax exemption to properties that are owned or occupied by a non-profit organization as long as the property is used for the purpose of that organization. If a non-profit organization owns a property but rents it to a for-profit organization, the exemption would not apply. As such, any permissive tax exemptions will need to exclude any portion rented to a for-profit organization. 40 High Street currently receives a permissive tax exemption that excludes the 861 square feet that is leased to a for-profit daycare. An extension of this exemption would continue to exclude the portion of the church leased to a for-profit organization.

Property tax exemptions may be for a term between one (1) and ten (10) years.

Attached documentation is as follows:

• Application summary
• Policy #1600-018 Permissive Tax Exemptions
• Permissive tax exemption applications

RECOMMENDATION:

THAT the Town of View Royal provide property tax exemptions for the following groups: Church Halls and Church Land for __ years (to be established by Council); Community Halls for __ years (to be established by Council); and Non-Profit Organizations for __ years (to be established by Council);

AND further that bylaws be prepared for the September 16, 2014 Council Meeting.

SUBMITTED BY: J. Beauchamp, Director of Finance REVIEWED BY: K. Anema, Chief Administrative Officer