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Some Calgary businesses believe tax assessment based on forecast not facts
Published Tuesday, September 19, 2017 8:43PM MDT
All Canadian businesses expect to pay the majority of a municipality’s property tax but many Calgary business owners say assessments are sometimes based more on assumptions that facts and that it is getting out of hand.
About 30 percent of Calgary’s downtown office space is vacant due to tough economic times but because the city can’t lose tax revenue, even during a downturn, other businesses are required to make up the difference.
The Chamber of Commerce says that policy is crushing the city’s medium and small business owners.
“One really sad and tragic thing is that we’re seeing businesses who are actually closing down because of property taxes,” said Scott Crockatt, from the Chamber of Commerce.
Indevelopments has an office building in the Mission district and says the amount of tax it has paid isn't based on what's on properties but what could be there someday.
CFO Jessie Lail says the abandoned Peking Dragon Restaurant, on 4th Street SW, sits unchanged on a property it bought two years ago and that the prior owner's tax bill was $49,500.
In 2017, Indevelopment’s tax bill on the property was $96,000 and Lail says the company challenged the city's assessment and lost.
The city said the increase in taxes was based on what Indevelopment paid for the property and what the company’s website said it planned to build, which was a five-floor office building, but then the market changed.
“They said is your intent to build a commercial building on this site and my explanation to them was, if my intent is to build the Taj Mahal, would you tax me on that? There's nothing on there right now, it's an empty restaurant, it's bare land,” said Lail.
Lail says the property tax on Indevelopment’s office building also went up $13,000 based on assumptions and that the city taxed it as ‘high exposure retail space’ because of its proximity to 4th Street even though it has never been used for retail and an assessor has never seen it.
“You can see 4th Street from here. You see a building right beside us, right behind you, but yet, this is supposed to be high exposure retail, how?” said Lail.
The city didn't address this case but in a statement to CTV News said…
“In order to prepare assessments, data is collected from multiple sources, verified and analyzed to ensure the property details are accurate and the assessments are reflective of market value…”
The Calgary Chamber of Commerce says more local businesses will go belly up if the city keeps taxing commercial properties to match its spending.
The chamber has asked city council candidates how they will deal with the situation and says it will post the answers on its new website, A Calgary that Works. To visit the website, click HERE.
(With files from Lea Williams-Doherty)