Homeland Housing gets three years to pay tax bill

by Colin Smith

Homeland Housing has been given 36 months to pay a disputed tax bill for Paul Krauskopf Court.

The 2020 tax bill for the community affordable housing development at 10501-101A Street amounted to $18,089.41, including $15,437.94 in tax arrears and $2,651.47 in late payment penalties.

In deciding the matter at its August 24 meeting, Council also dropped the late penalties, restoring the amount owing to $15,437.94.

In July, Homeland Housing executive Raymond Cormie asked council to consider either exempting the agency from payment of property taxes, interest and penalties, reducing the amount of tax payable and forgiving interest and penalties, or just forgiving penalties.

The land on which Paul Krauskopf Court now stands was transferred from the Town of Morinville to Homeland Housing in January 2019. At that time the land, valued at $284,790, became subject to municipal tax.

Construction began that spring, with a building inspection of the foundation on May 29 finding it complete.

In the meantime, the town received a letter from the provincial Alberta Seniors Housing Corporation (ASHC) noting that the properties it owns are exempt from municipal taxation. However, ownership on the title of Paul Krauskopf Court was Homeland Housing.

The following year, with construction completed, the property was assessed at $1,513,690 and a tax notice for $15,437.94 was sent to Homeland Housing.

Subsequently, ASHC informed Morinville of its position that as it had a 50-year lease agreement with Homeland Housing, the property had always been exempt from municipal taxation.

But that lease was not registered on the property title until January 2021, so as far as Morinville is concerned the 2020 taxes still need to be paid. They have now risen to $18,089.41, including one 7.5% interest rate penalty of $1,157.85 and a 9% interest rate penalty of $1,493.62.

The province determined that it would not pay the outstanding property taxes, leaving Homeland Housing as the registered owner to pay them, although it is not receiving rental revenue from the property.

In the discussion of the issue at the August 24 meeting, Councillor Sarah Hall, who is on the board of directors of Homeland Housing, said paying the tax bill would be a financial hardship for the not-for-profit agency.

“This will impact our bottom line for sure,” she said. “We already are running behind in revenues.”

Hall proposed that the 2020 tax bill for Paul Krauskopf Court be cut to a flat $10,000.

“Reducing the overall amount is a more palatable pill to swallow,” she said. “In my mind to split the difference is a little bit easier on both of us.”

Hall’s proposal was supported by Mayor Barry Turner, but defeated in voting, with Councillors Rebecca Balanko, Nicole Boutestein, Lawrence Giffin and Scott Richardson opposed. Council Stephen Dafoe was not in attendance at the meeting, being out of town.

Instead, Council favoured a motion by Giffin calling for the tax bill to be cut by eliminating the late payment penalties.

“The fact that the bill has been under dispute for that time and possibly is only a misunderstanding on Homeland Housing’s part,  I don’t feel comfortable with penalizing them,”  Giffin said. “But as far as the tax bill itself goes, I think it should stand.”

With an amendment by Boutestein extending the payment period, the motion passed 5-1, with Hall in opposition.

Hall stated that she was opposed to the motion in principle.

“I don’t think this is fair,” she said. “This is a tax payment we wouldn’t have received if there hadn’t been a clerical error.”