Council Report: 2020 Tax Sale Deferral
A report discussing the option to defer the annual tax sale due to COVID-19, with staff recommending against deferral.
TOWN OF VIEW ROYAL COUNCIL REPORT
TO: Council DATE: June 29, 2020 FROM: Steven Vella, Manager of Accounting MEETING: July 7, 2020
2020 TAX SALE DEFERRAL
RECOMMENDATION:
THAT the report dated July 2, 2020 titled “2020 Tax Sale Deferral” be received for information.
CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:
I concur with the recommendation.
PURPOSE OF REPORT:
To inform Council of provisions under Ministerial Order No. M159, Division 4, providing Council with the opportunity to defer the 2020 tax sale to September 27, 2021.
BACKGROUND:
On May 15, 2020, the Minister of Public Safety and Solicitor General issued a Local Government Finance (COVID-19) Order. The intent is to ensure that certain financial measures be authorized so that local governments have operating funds during the emergency and the impacts of the emergency are lessened by varying, extending or deferring requirements.
Per the Ministerial Order, Division 4,
15 (1) A council of a municipality may, by bylaw adopted on or before August 31, 2020, defer the annual tax sale for 2020, provided for under Division 7 [Annual Municipal Tax Sale] of Part 16 [Municipal Provisions] of the Local Government Act, until September 27, 2021, with the effect that the annual tax sale would be on that date in respect of the upset price described in section 649 [upset price for tax sale] of that Act.
DISCUSSION:
Property taxes that are delinquent in 2020 were first levied in 2018 and have remained unpaid to date. Historically, Finance staff have been very effective at collecting delinquent taxes, making a tax sale unnecessary.
The total number of properties subject to 2020 tax sale and their respective balances owing including interest to the date of this report compared to the three preceding years is displayed below.
| 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|
| Number of properties | 13 | 12 | 18 | 21 |
| Total delinquent outstanding | $8,891 | $9,936 | $25,571 | $28,923 |
The delinquent taxes owed for the 13 residential properties range from <$1 to $3,541 as follows:
| Balance | Number of accounts | Total value |
|---|---|---|
| < $500 | 8 | $1,553 |
| $501 to $1,000 | 2 | 1,507 |
| $1,001 to $1,500 | 2 | 2,290 |
| >$1,500 | 1 | 3,541 |
| Total | 13 | $8,891 |
Deferring the tax sale would recognize that the COVID-19 pandemic has a financial impact on some taxpayers and their ability to pay their delinquent taxes. However, these taxes became outstanding prior to COVID-19 and the pandemic was not the original cause of the taxes becoming delinquent. Allowing residents to avoid paying delinquent taxes for another year would result in the 2021 delinquent amount including both 2018 and 2019 taxes. This may create a greater challenge for the taxpayer to clear the delinquent amount next year.
If Council wishes to defer to the 2020 tax sale it would have to adopt a bylaw to that effect prior to August 31, 2020. Staff are recommending that tax sale not be deferred, in which case no action needs to be taken. As in prior years, Finance staff will make every effort to collect all delinquent taxes prior to the September 28, 2020 tax sale date.
RECOMMENDATION:
THAT the report dated July 2, 2020 titled “2020 Tax Sale Deferral” be received for information.
SUBMITTED BY: S. Vella, Manager of Accounting
REVIEWED BY: D. Christenson, Director of Finance
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