Four property categories could pay fewer taxes this year based on changes the provincial government has made to their assessment values, a fact also reflected in this year’s proposed municipal tax policy.
Commercial and industrial, grain elevators, railways and pipelines, and resource industry classes all had their percentages of value changed to 85 per cent from 100 per cent for this year to help lessen the difference in taxation levels between residential and commercial properties, a city council report explained.
This means that if a house or building has an assessed value of $100,000, only $85,000 would be taxable based on the changes.
These changes potentially create winners and losers depending upon personal circumstances and the property class, since someone’s taxes might go up 25 per cent and another might go down 10 per cent, finance director Brian Acker said during a recent executive committee meeting.
Council approved several recommendations related to the tax policy during the meeting. The recommendations will become official when council approves them at a future meeting, likely on Monday, June 14.
Values of property classes
Single-family residential
Single-family residential is Moose Jaw’s largest single property category since it accounts for 65 per cent of the taxable assessment and 56 per cent of tax revenue, Acker said.
There are 11,509 of these properties in Moose Jaw. Based on this year’s property reassessment, this category will decrease by 10.6 per cent in taxes, with an average decrease of 10.84 per cent.
Based on 2020 municipal property taxes in urban centres in Saskatchewan, Moose Jaw has the third-lowest residential taxes at $1,417 per year using an assessed value of $200,000, Acker’s report said.
Meanwhile, there are 179 multi-residential properties in Moose Jaw. They face an increase in property values of 15.56 per cent, while the average increase is 11.63 per cent.
Also, there are 1,090 multi-residential/condominium properties in the city. This class faces a decrease in reassessed values of 11.37 per cent, with the average decrease being 8.36 per cent.
Commercial and industrial
The commercial and industrial property class is the second-largest category in Moose Jaw and accounts for 21 per cent of taxable assessment and 33 per cent of tax revenue, Acker continued. This year’s property reassessment decreased 6.93 per cent, with most of that due to the provincial government’s changes.
There are 945 properties in this category in Moose Jaw. If the province’s changes to this class were excluded, this category would see an increase in taxation of 10.25 per cent, with the average increase being 19.48 per cent.
Moose Jaw has the sixth-lowest commercial taxation rate in Saskatchewan at $2,642 per year, based on $200,000 taxable assessed values, said the report. Regina is in third place with $2,027 per year in municipal taxes.
Remaining competitive
Coun. Dawn Luhning pointed out the difference in commercial tax rates between the two cities, saying council should work to reach that Regina’s level of taxation since both cities compete commercially.
“People can get to Lowe’s in a half-hour from Moose Jaw,” she said, noting council should also address the commercial mill rate factor since the pandemic has hit businesses hard here and she didn’t want the tax policies to “cause (them) any undue grief.”
The provincial government’s decision to reduce the percentage of value factor for commercial and industrial was also the right decision, Luhning added, since this class had been paying more taxes compared to residential.
Council then voted unanimously that the municipality be “revenue neutral” by the major groupings of residential and commercial property classes. This means commercial, industrially, elevators, resource industry, and railway/pipeline properties will be grouped, while residential, multi-residential and multi-residential/condominium will be grouped.
These classes combined are expected to generate more than $29.9 million in tax revenue this year.
Being revenue-neutral means the municipality would generate the same amount of taxes in 2021 as 2020 and would not look to create any additional tax dollars, before the 2.96-per-cent mill rate increase is applied, Acker explained. Being revenue-neutral by group is the same approach council took in 2013 and 2017 and provides a consistent overall level of taxation.
Golf course sub-class
Deer Ridge Golf Course is a private venue that competes against two other courses that don’t pay municipal taxes, so city hall created a separate sub-class for golf courses in 1997 to create a fairer playing field, said Acker. This year’s property reassessment of that course increased 17 per cent, bumping the venue’s taxes to $4,972 from $3,904 last year.
Council then voted to maintain the golf course sub-class and adjust the mill rate factor to allow for the increase in assessed value and subsequent increase in 2021 taxation for the municipal portion of taxes, before any other tax increases are considered.
Agriculture and non-arable land
Six owners have agriculture-related property within city boundaries.
Those with non-arable agricultural property face an increase in reassessed values of 54 per cent, while those with other agriculture-related property face an increase of 18.66 per cent, Acker’s report said. The first group will pay $932.11 in taxes to the city and Rural Municipality of Moose Jaw this year, while the second group will pay $22,148.08.
Since the city historically sets its mill rates before the RM, city administration adjusts the mill rate factor based on the prior year’s taxation level, said Acker. This means city hall is taxing these properties at 2020 levels instead of 2021.
“It’s good to note that it’s at the same level as the RM. I think there’s sometimes a misperception that because they’re in city limits, it’s more. That’s not the truth,” said Coun. Crystal Froese. “It is about trying to be competitive in that area.”
Council then voted to set the mill rate factor for both sub-classes this year at the same taxation levels as if the properties were in the RM.
Council also voted to have city administration draft and bring forward for approval the 2021 property tax bylaw and amended tax payments, discounts and penalties bylaw.
The next executive committee meeting is Monday, June 14.
