(File photo/battlefordsNOW Staff)

By Angela Brown

Sub classification being considered

Care home to see interim abatement to ease tax increase

Apr 26, 2022 | 3:47 PM

Harwood Manor personal care home in North Battleford will see its tax burden lightened in the short term as it adjusts to being in a higher tax classification.

City of North Battleford council approved administration’s recommendation to classify the property as commercial and provide a three-year abatement to phase in the tax impact before the next revaluation. This would reduce the abatement by one-third each year.

Council will also consider possibly creating a sub-classification starting in 2023 for personal care homes.

Finance director Brent Nadon noted in his report to city council Monday that Saskatchewan Assessment Management Agency’s (SAMA) 2019 property assessment adjustments review of care homes determined these properties should be classified as commercial instead of residential for tax assessment purposes.

The city previously granted a partial tax abatement for private care homes moving into the higher tax rate for the 2021 tax year. Only a small number of properties were affected.

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“As Harwood Manor is a business providing a service, we strongly support it being classified for tax purposes as a commercial property,” Nadon said.

Budget-wise, he noted that if the properties were taxed at the residential rate instead, the impact of the tax revenue loss to city would be $70,000 per year for one large property — Harwood Manor — along with two other small personal care homes.

City manager Randy Patrick said SAMA stated the Harwood Manor property is commercial. He added a similar property has gone through the tax process and it was also found to be commercial.

Mayor David Gillan noted it is SAMA’s responsibility as the assessment agency to decide classifications, not the city’s.

“They bring this information to the city. So this confusion in the last few years is really their workings not ours about changing things around,” he said. “However, at the same time, the advice from them is that this is what their final decision is now. That it should be commercial.”

Gillan said Harwood Manor was the only property being considered for the abatement due to the large size of the property.

Coun. Bill Ironstand proposed the city abate the taxes for three years while it considers a draft bylaw. He was concerned if Harwood Manor was taxed as a commercial operation it might impact the home’s rates for its customers.

Coun. Kent Lindgren was worried if the city created a sub-classification under commercial for personal care homes it would risk having to start looking at creating “other sub classes across the board.”

Looking at fairness

Gillan asked administration to bring back more information for council to consider why it might want to classify this type of property at a different rate other than a commercial tax rate.

“It plays into fairness for everyone, equity for everybody,” he said. “We need to make sure we are doing what’s fair for everybody, and we are giving some sort of concession on commercial taxation for a reason… I use the word concession as a lesser mill rate because that’s what it is. As soon as you lower the mill rate, taxes go down.”

Council approved a resolution to move the Harwood Manor property to commercial classification for taxation with a three-year abatement. As well, it passed a second resolution to direct administration to bring forward a draft bylaw for consideration to implement a personal care home sub-classification under the commercial classification for the 2023 tax year.

“If next year, council wants to give them a different mill rate, then they won’t be far off from where they will be after this year,” Gillan said. “And if we decide they stay commercial, then they will have one-third less abatement the next year. Then, they will be at full tax.”

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Angela.Brown@pattisonmedia.com

On Twitter: @battlefordsnow