To help ease the financial burdens caused by COVID-19, the District of Squamish will be pushing back the late-payment penalty dates for property taxes and utilities.
Instead of having a penalty of 5% take effect after July 2, with an additional 5% on Aug. 1, those penalties will start to apply on Oct. 1 and Dec. 1, respectively.
“I think it is an important piece of what the municipality can do to try and support...our residents,” said Coun. Jenna Stoner.
“It is a balancing act. This is our cash flow, and it’s what allows us to maintain the services that people depend on — the basics of that being water, sewer, sanitary. And, so, recognizing that we don’t want to push the envelope too far on this one, but I do think that it will be appreciated by our community that we’re trying to find the solutions that we can.”
The official tax deadline, however, will still be July 2 — it’s just that payment penalties will not take effect until Oct. 1.
That’s because the District is still asking residents who can afford it to pay up on July 2, as the municipality is concerned that if cash shortfalls are severe enough, it could affect services.
“This is our one source of revenue and...the services that you have come to rely on depend on you paying your property taxes,” said Mayor Karen Elliott.
“For those homeowners that can...please pay on time — and I think that has to be part of our messaging to the community so we can avoid a more dire situation at the end of the year.”
These new deadlines will also apply to utilities, which have been collected on the same day as property taxes for several years.
On April 30, council voted unanimously in favour of directing staff to make these changes to the tax collection bylaw. Staff will then bring it back for final approval in early May.
Linda Klassen, the District’s acting chief financial officer, said that under normal circumstances, the District would have collected about 87% of its taxes by July 2, and 97% by the end of the year.
Overall, about $57 million in taxes is collected, including utilities and other requisitions attached to a property tax bill like school, hospital and regional district taxes.
She said it’s hard to say how that will pan out this year, but the municipality will likely manage despite the expected delays in payment — at least for a few months.
“I feel confident that we’re OK to the end of the year,” said Klassen. “With this delay in three months, we can manage that. It really depends on how the homeowners respond to the collections and it’s difficult for us to say with certainty how that will come about.”
However, there are some people who will likely still pay on July 2, regardless of the penalty deferrals.
These would be people paying their taxes through mortgage companies, which is estimated to account for about $4 million, Klassen said.
People paying under the provincial deferment loan program are also expected to pay on the usual date, as the province generally pays in their stead at that time.
These payments will make up about 2% of the money collected, Klassen said.
Given the pandemic, it may be harder to pay property taxes, as municipal hall could be closed at the time, she said. However, people will still be able to pay via electronic fund transfers, at their bank, through mail and via the municipal hall drop box.
The District’s measures are meant to give residents and all other property owners some help after the province extended tax breaks to businesses.
On April 16, Finance Minister Carole James announced a slew of relief measures intended to help entrepreneurs weather the economic fallout from COVID-19.
Among these measures included a reduction in the school property tax rate for commercial properties. This is intended to lower the overall property tax bill for most businesses by about 25%.
Second, the province pushed back the late penalty date for commercial properties to Oct. 1.
In Squamish, 65% of tax collections come from residential property owners, and 25% are from commercial owners.
The municipality also usually has a tax sale in late September for properties that failed to pay taxes for about three years. These properties would be offered for sale as a result of non-payment.
