City council has done something to ease that sickening feeling you might get on Canada Day. It has nothing to a national celebration – it’s the day after your property taxes are due. And as it has stood until now, being a day late would see you saddled with a seven per cent interest charge that could be in the hundreds of dollars.
The bylaw has been changed to see three plateaus through the year that sees the charge go up five per cent each time. Council considered several options, including a three, six, nine proposal from Coun. Brian Anderson who raised the issue a couple of weeks ago, in order to meet a budget deadline.
“I would have been happier with three, I’m okay with five,” he said. “It is reduced.”
Ninety-six per cent of tax payers meet the deadline, so this adjustment is for a small segment that in some cases simply hold out until the last possible second. Every March the city produces a report that has page after page of property titles that are subject to auction for delinquent taxes. Then every year just before the possible sale, the taxes are paid up, taking them off the auction block.
“I do agree with Coun. Anderson bringing this forward that seven is high, particularly in this climate,” said Mayor Don Iveson. “So I think it’s a very reasonable adjustment.”
What worried Iveson was home owners would use a low penalty as the lesser of two evils and use the thousands they don’t pay to the city for a few months to invest and gain a higher interest rate to improve their cash flow.
“Interest rates are lower right now, the economy is tighter, I think five per cent might send that signal (that missing the deadline is illegal). I think lower might have encouraged people to deal with their cash management challenges through the City of Edmonton and we’re not a bank. We’re not set up for that.”
Coun Anderson said he’s worked with the tax department to see if the assessment that comes to your mail box a year from now can spell out not only the amount due on June 30, but with the other three five per cent penalties added on, just so you know from the outset what you’re dealing with.
“I would like to see assessment and taxation let people know that they have a choice, to pay by the deadline, or one, two, three, four, five choices.”
The three, five per cent penalties won’t cost the city any lost revenue council was told.