A couple who signed a tax exemption agreement with city hall wants to shorten the timeframe of the deal, but the municipality says this would set a future precedent for similar agreements.
Victor and Susan Salzsauler spoke to city council during the Jan. 10 regular meeting and asked for a revision to their tax exemption agreement under the city’s replacement housing incentive program (RHIP) for 1029 Oxford Street East.
Council, however, denied their request by voting 6-0 to receive and file the report.
Mayor Clive Tolley recused himself from the vote.
Presentation
Mr. Salzsauler explained that this was the third time they had come to council about this property. The first time, the homeowners asked for discretionary use to build a secondary suite in the basement, while the second time, they asked for permission to expand the suite; council approved both requests.
“Hopefully, we can agree to approve the request so we and the City of Moose Jaw can both prosper … ,” he said. “We designed and built this house ourselves. This house improved the neighbourhood immensely, so please reward us for our hard work. We encourage city council to vote yes.”
This new home will not be the Salzsaulers’ “forever home” since they plan to move in a few years, Mr. Salzsauler added. They are living upstairs and renting out the basement. They intend to renovate the property and then move back to another property they own while selling the rental site.
Council response
Both councillors Jamey Logan and Heather Eby spoke against the request, saying it put council in a difficult position since they would have to do the same thing when others asked for variances.
“Once you start messing with that policy, you’re just changing the whole policy and it becomes a nightmare for the planning and development department,” said Eby. “It’s a fair policy as it stands.”
Background
RHIP is intended to stimulate the construction of new housing in older areas. Applicants must demolish an existing house and construct a new single-family residential or duplex dwelling on the same site. Or, applicants must build a new single-family home on an infill vacant lot.
Applicants must complete construction within one year of receiving the building permit. City hall will then give applicants a full tax exemption for five years beginning on Jan. 1 of the following year of completion.
The Salzsaulers’ tax exemption agreement began on Jan. 1, 2022, and ends on Dec. 31, 2026. However, they plan to sell the property in 2024 and want a revision to the program’s terms, a council report said. This revision would allow them to receive a tax exemption starting on March 4, 2021 — the date when the home was nearly completed and occupied — rather than Jan. 1, 2022.
This means, the report pointed out, that the Salzsaulers would benefit from zero taxes from March 4, 2021, to Dec. 31, 2023.
“The actual tax levy for 2021 is $2,465.58, therefore, over a five-year period, it would be approximately $12,327.90 that would be either lost or gained depending on the outcome,” the report said, noting the homeowners were previously involved in RHIP for a different property and are aware of the program’s terms.
City hall advised the Salzsaulers on Aug. 9, 2021 that their exemption would begin Jan. 1, 2022, but on Dec. 20, 2021, Mr. Salzsauler asked to have their tax exemption reduced by two years so they could benefit from zero taxes for the requested timeframe.
RHIP’s terms do not allow homeowners to start their exemption on random dates, while city administration advised the Salzsaulers that they would not approve the request, the report said.
“More importantly, the city would set a precedent if changes to the program are made for this applicant,” added the report. “The city would end up with a number of exemptions that do not align with year-end and would be administratively burdensome … .”
The next regular council meeting is Monday, Jan. 24.
