The small city of Rossland in the West Kootenays voted last month to tax some vacant land around the local Catholic Church.
We've talked a lot about permissive tax exemptions in the past. Provincial laws require that places of public worship are exempt, but your council has the authority to decide whether other property held by a religious organization is subject to property taxes.
Every dollar of foregone revenue from these exemptions has to be shouldered by homeowners and local businesses.
We've found that most communities grant these additional exemptions but more are questioning their broader benefits.
The Sacred Heart Roman Catholic Church had requested an exemption for the vacant land (in red) around its building, which is automatically exempt. That land was assessed at about $140,000 and subject to $1,368 in taxes annually without the exemption. That would increase to $1,600 by 2027, resulting in roughly $4,500 in taxes over three years.
The land subject to taxes is highlighted in red.
The impact of the permissive tax exemption.
In its application for the exemption, the Church noted that its property is not rented out and is used exclusively for worship, pastoral care and religious education of its members. They also maintain the local Catholic cemetery.
Ultimately, council voted against the request.
The motion to grant the church's request for a permissive tax exemption was defeated.
In his comments to iNFOnews.ca, Mayor Andy Morel said:
It wasn't a decision based out of any kind of ideology. It was money.
We wish we had more ways to seek taxation and this is one opportunity.
Earlier this year we saw the City of Terrace cap the total permissive tax exemptions they intend to grant. Meanwhile, the Village of Nakusp requires applicants to prove their financial need, and the council rejected several applications (there were none from places of worship) this year for failing to provide sufficient documentation.
These case studies show councils responding to the tight fiscal challenges they face. Unwilling to increase the tax burden of existing residents, they're starting to rein in tax exemptions to save a few dollars.
Learning from these examples, we're developing model bylaws for councils to adopt to apply stricter benefits tests to potential permissive exemption applicants. Support our work by becoming a member or making a donation today.