NS: HRM looking to change formula of commercial tax

Aly Thomson
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Metro Halifax

Basing assessment on three year average considered

Patrons browse items at Hilltribe on Barrington Street on Wednesday. The city is considering changes to the way it calculates commercial property taxes in hopes of better supporting small business.

[HALIFAX, NS] – The municipality is looking at changing the way it calculates commercial property taxes to improve predictability and prevent big spikes every year.

The proposal calls for taxes to be based on a three-year average of property assessments rather than one year, reducing drastic increases caused by a hot real estate market or lack of data about the area.

The audit and finance committee recommended Wednesday that council look into the legislative changes that would allow the use of averaging.

But staff have also been asked to determine how the change would impact small businesses and whether there is a better alternative.

Coun. Tim Outhit asked for a staff report investigating, among other things, how other municipalities are supporting small businesses through tax incentives.

“If this doesn’t help small business, then it makes me less enthusiastic,” he said.

Coun. Barry Dalrymple said council should consider lowering tax rates for small businesses across the board.

“If we want to keep growing the the HRM… I think lower tax rates for small businesses is the way to go,” he said.

Some councillors doubted the averaging system entirely, including Coun. Stephen Adams, who said it could negatively affect not only small businesses, but also new ones.

“Clearly, something needs to change, and I think that’s why we’re here. Something’s got to give,” said Adams. “But what would be wrong with freezing the assessments or eliminating assessments?”

Mayor Mike Savage agreed the proposed changes need further scrutiny.

“If you want to encourage an area that has different kinds of interesting small businesses then you have to do something that encourages that rather than just drive them out of the marketplace,” said Savage. “I think we need to at least look at other options.”

Staff said that businesses growing quickly would benefit from assessment averaging, whereas businesses with slow growth would not benefit as much.

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  • Sean
    September 19, 2013 - 09:43

    Only the government would chose to overcomplicate this. It's commercial property - flatten the rate in bracketed groups of size. They sure have no problem doing that same thing to increase how much tax I pay when I hit a new bracket. It fosters cheaper taxes for small business, eliminates the needs for assessments beyond an initial measurement if the space isn't already on file, and let's prospective investors know in advance what the tax load would be on any given property in advance. Not only that, but if it was flattened without factoring location, it might make downtown much more attractive. If they really wanted to foster business, they'd approach taxation like a business - simple to price, cheap to maintain, and able to be forecast.