New Tax Policy approved by Council will see slower rise in non-residential tax rate

by Colin Smith

A new taxation policy for the town of Morinville could see the residential/non-residential rate split rise to 1:1.25 by 2025.

The policy was approved by town council at its regular meeting Tuesday, Oct. 11.

The split would rise by annual 0.05 increments according to the new policy.

Brought forward by Financial Services Manager Travis Nosko, the policy was developed following the September 11 committee of the whole meeting of council that favoured a slower rate of increase for the rate split.

Initially, the policy extended to 2026, with the tax split reaching 1:1.3.

However, Councillor Scott Richardson argued that the final year was beyond the mandate of the current council, and that setting the rate should be left up to future council members.

Council voted in favour of Richardson’s amendment to that effect.

Council had also asked the administration to bring back information about the level of taxation of non-residential properties in Morinville as compared to neighbouring communities.

Nosko produced a comparison between two similar franchise properties in Spruce Grove, Leduc and Beaumont, along with Morinville, based on GIS data and publicly available property tax bylaw information.

The first business in Morinville was assessed at 25.7% less than the average, is subject to a tax rate of 6.4% below the average and had a municipal tax levy of almost $20,000, or 30.8%, less than the average.

The second business in Morinville was assessed at 10.4% less than average, is subject to a tax rate 11.4% below the average and is assessed a municipal tax levy of more than $4,000 less than the average, or 20.5%.

Nosko concluded that the comparisons indicated that, “even with the increases proposed to the non-residential tax ratio Morinville will maintain competitive non-residential tax rates.”

A split tax rate was reintroduced in 2019 by the previous council after several years in which residential and non-residential rates were equal.

It was set at 1:1.1 and has remained there despite Morinville’s Long Term Financial Plan, adopted in October 2019, calling for the split to increase to 1:1.5 in annual increments of 0.1.

Council has declined to increase the split in its last three budgets, which could also be the case for the 2023 budget regardless of the new policy.

The new taxation policy will also introduce an assessment sub-classification for serviced undeveloped residential properties, with their tax rate to be set at the same rate of taxation for non-residential properties for the same taxation year.

The ratio of non-residential to vacant non-residential land will be set at 1:15.

Supplemental assessment and taxation is also allowed for by the policy.

This applies to new growth in property assessment during the taxation year.

Property tax will be levied through supplementary assessment when properties have been completed and approved for occupancy.

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