Terrace caps property tax exemptions
Publisher: In-Sight Publishing
Publisher Founding: September 1, 2014
Publisher Location: Fort Langley, Township of Langley, British Columbia, Canada
Publication: Freethought Newswire
Original Link: https://www.bchumanist.ca/terrace_caps_property_tax_exemptions
Publication Date: June 20, 2024
Organization: British Columbia Humanist Association
Organization Description: The British Columbia Humanist Association has been providing a community and voice for Humanists, atheists, agnostics, and the non-religious of Metro Vancouver and British Columbia since 1982. We support the growth of Humanist communities across BC, provide Humanist ceremonies, and campaign for progressive and secular values.
By Ian Bushfield
Churches and all other non-profit organizations in Terrace will soon have to pay some property taxes under changes approved by Council on June 10.
Provincial law dictates that various properties are exempt from taxes in British Columbia. Some are fully exempt, while other lands may be granted a permissive tax exemption (PTE) by the local government. For religious landowners, a ‘place of public worship’ is automatically exempt. Excess lands, such as parking lots or thrift shops, are eligible for a PTE.
The BCHA has previously shown that municipalities across the province take different approaches to these permissive exemptions, with some granting nearly every request and others rejecting them all.
The City of Terrace was granting most requests but has recently begun reconsidering its approach. The number and cost of the exemptions in the City have grown, meaning non-exempt taxpayers – predominantly homeowners and local businesses – must shoulder that excess burden.
Under its new policy, the City has set a cap on the total amount of PTEs it will grant going forward, with a target of reducing all exemptions by 35% over the next four years.
Specifically, Council amended its permissive tax exemption bylaw with the following:
Funding
- Council will determine a fixed total amount (funding cap) of revenue to be foregone by permissive tax exemptions for not-for-profit organizations and places for public worship for a four-year period, to coincide with the four-year application cycle. The funding cap will be based on the municipal-only portion of the tax exemptions and will increase by the same percentage as the general property tax increase set by Council.
- If the total of non-for-profit and public worship applications exceeds the established funding cap, including any new qualifying applicants, all groups will receive a reduced fixed percentage exemption of their total property assessment for the four-year period.
In other words, Council has decided a set amount of funding to be raised from PTE applicants, who will then share those costs in proportion to their assessed values. If there are more applicants, everyone pays less taxes.
Between 2025 and 2028 the cap on exempted taxes will be reduced from $646,642 to $466,431. This results in the City collecting $60,071 in 2025 and $240,282 in 2028 from PTE applicants. The bulk of Terrace’s PTEs go to the local airport, which received nearly $300,000 in exemptions in 2022.
Religious organizations in Terrace received over $23,000 in exemptions in 2019. Under the new policy, they will collectively owe around $8000 in property taxes by 2028.
Unfortunately, not only does this policy not differentiate between places of worship, which often cater only to members of that particular faith, but it also amends the PTE policy to fully exempt those organizations from having to apply for PTEs. Instead, a new line says that “staff will confirm continued eligibility.” It’s hard to reconcile this approach with the eligibility criteria in the policy that includes a requirement that the organization “must provide a benefit to the broader community and should be available to the general public.”
Terrace’s decision highlights one of the novel ways that local governments can attempt to balance the interests of taxpayers against the desire to subsidize nonprofit organizations in the City and may serve as inspiration for other councils.
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