Council votes to remove supplementary tax

By Stephen Dafoe

Morinville – The only surprises new home owners will get this Christmas are the gifts under the tree. Morinville Town Council voted unanimously Feb. 8 to get rid of its supplementary tax bill for 2011, 2012 and 2013 subject to an annual review during the first quarter of each year. While the future of the tax remains open, home owners and developers will not receive a supplementary tax notice in 2011.

Morinville’s Director of Corporate Services Andy Isbister told council the tax was implemented years ago to create additional revenue for the Town of Morinville. That revenue ranged between $12,000 and $50,000 per year.
The matter of Morinville’s supplementary taxes was brought to council during the Jan. 18 Committee of the Whole meeting after the town received letters from Brookhaven Developments Ltd. and Champlain Developments Inc. opposing the tax. In the Brookhaven letter, President Gary Rowe referred to Morinville’s supplementary tax as an “unfair penalty” against developers and a charge that remained unknown until the end of the year.

Under Morinville’s Supplementary Tax Bylaw, the town’s assessor reassessed all properties in the community where building permits were issued and final inspection reports had been requested. These reassessments were completed in October and Morinville would issue a supplementary tax bill in late October or early November. Property owners and developers had until the end of December to pay the supplementary tax bill or were subject to an 18 per cent penalty.
The situation resulted in many new homeowners receiving surprise property tax bills in the $2,000 range late in the year.

“It’s kind of a regressive tax,” Isbister told council. “We encourage people to move to Morinville then we give them a nice Christmas present as a tax bill.”

Isbister went on to say the tax could discourage a number of builders from building spec homes and could create a situation whereby builders held off on asking for a completion certificate to avoid the supplementary tax.

Administration felt there were many advantages to removing the supplementary tax, including preventing new home buyers and contractors building spec homes from taking a big tax hit at the end of the year. Additionally, it was felt the removal of the tax could be a cost-effective form of economic development as the non-tax would apply to commercial developers as well as residential.

Council had initially been asked by administration to consider removing the supplementary tax for 2011; however, Councillor Gordon Boddez suggested extending the removal of the tax until 2013. Councillor David Pattison expressed his concerns about extending the removal for three years without the possibility of revisiting the idea.

“I hate tying my hands for three years,” Pattison said, adding he could support the three-year term if an annual review of the tax was considered. “I’m leery of tying our hands for three years and not being able to come back to it.”

Morinville’s supplementary tax has been removed for 2011 and will be reviewed in the first quarter of 2012 and 2013.

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