Burnaby’s previous planned property tax increase of 3.5% could be halved as the city seeks to offer some relief to residents and local businesses during the COVID-19 pandemic.
In Monday night’s council meeting, a report is recommending council direct staff to bring a 1.75% increase to this year’s budget and delay the time at which penalties kick in for late payments.
Council was initially slated to debate the budget this week, but instead that will be coming on May 11 – just a few days before the May 15 deadline. In that meeting, the public will get a full look at the final budget proposal, something that will likely have been heavily altered from the provisional budget revealed earlier this year.
“During this period of uncertainty caused by the COVID-19 pandemic, all levels of government are reviewing ways in which support can be provided to citizens,” reads one staff report.
“Because the timeline for recovery is unknown, local governments are in agreement that some sort of support on property tax deferral is required. Unfortunately, not all local governments are on the same page with regards to delaying the property tax due date or delaying penalty charges.”
Staff is offering council three options: leave the property tax due date as is, delay the due date altogether or delay the penalties associated with late payments. However, staff noted the province has decided not to defer property taxes collected by cities and relayed to other authorities, such as TransLink and school districts.
The city currently imposes a 5% penalty after the July due date and another 5% penalty after Sept. 2, according to the staff report.
Staff deemed the first option – status quo – not to be viable, as the province’s announcement deferring property tax late penalties for commercial properties to October would create a conflict in the city’s tax system.
Instead, under the second option, staff is proposing the penalties for residential properties also be deferred to Oct. 1, while retaining a July 3 due date. Under that option, the penalty would jump straight to 10% for commercial and residential properties.
But to do so, the city would need to pay out of pocket for the TransLink and school taxes, which would require dipping into the city’s reserves. As a result, the city would not collect interest on that money.
In the third option – pushing back the property tax due date entirely back to Sept. 30 – the interest lost by dipping into the city’s reserves would total $800,000, according to the staff report.
