As part of their budget process, Halifax regional councillors will consider increasing the rebate on property taxes for non-profit organizations providing affordable housing.
Council’s budget committee met on Wednesday to hear presentations from three municipal business units — Fiscal Services, Finance, Asset Management and ICT, and Corporate and Customer Services. Councillors approved, in principle, proposed operating budgets for all three.
The Finance, Asset Management and ICT budget, approved for about $43.2 million, could be increasing by $446,000.
That’s because staff brought forward an option over their target budget for council’s consideration: “Increase non-profit tax rebate for affordable housing from 25% to 50% starting in fiscal 21/22.”
Many registered non-profit organizations in HRM are eligible for some level of property tax relief, ranging from conversion to residential (versus commercial) tax rate to 100% tax relief.
Two thirds of non-profits receiving tax relief are housing providers, according to a September 2020 staff report.
Some of them, including the Dartmouth Non-Profit Housing Society and Harbour City Homes, have some of their properties 100% exempt from property taxes.
Others, like Adsum Association for Women and Children and Affirmative Ventures Association have 75% relief on some of their properties. Many more get 50% relief, but most housing nonprofits get 25% relief, including many housing co-operatives.
The proposal from staff, which will be accompanied by a short briefing note for councillors later in the budget process, would presumably move all those housing providers to 50% relief.
“This would be an ongoing expense and we would have to build that into the budget each year going forward,” chief financial officer Jane Fraser told council on Wednesday.
In September, council voted in favour of staff-recommended amendments that make it easier for non-profits to maintain their tax relief. They’ll no longer have to complete a full application every year.
More certainty in the level of tax relief for housing non-profits would not only free up more money for them to provide more housing or squirrel away rainy day funds, but could also provide more confidence for potential lenders, including the Canada Mortgage and Housing Corporation.
There was little discussion on Wednesday on the item from councillors, who voted to add the $446,000 to their budget adjustment list, sometimes called the “budget parking lot.” At the end of the budget process, scheduled for April 20, council’s budget committee will debate whether to add those items to the budget and how to pay for them.
Because the $446,000 is an ongoing expense, staff will caution councillors against paying for it using one-time money like surplus or reserve funding.
The budget parking lot items, including last week’s additions, now total $650,600.
The budget committee meets again next week to consider operating budgets from Halifax Regional Police and Halifax Public Libraries.
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Tax breaks on housing co-ops should be subject to analysis of the income of occupiers and the mortgage debt.