Property owners who undertake significant improvements to their industrial or commercial buildings may soon be eligible for a tax break.
Hope council discussed the idea of adopting a revitalization tax exemption program to encourage new investment in designated areas during a committee of the whole meeting on Tuesday. The goal is to create economic activity in Hope that will provide jobs for local residents and provide incentives for new residents to move to the community.
“It’s more a message of being business friendly,” said Coun. Scott Medlock. “The intent is not to get your full investment back, but rather a way for you to save some money.”
The Official Community Plan for the district identified commercial, industrial and downtown revitalization as a priority. In 2004, the Community Charter was introduced, offering a new revitalization tax exemption opportunity. AdvantageHOPE took the lead on the project this year and circulated the proposed bylaw for feedback.
If passed, council will be able to enter into an agreement with property owners within the designated areas and upon issuance of an exemption certificate to the assessor, those improvements are exempt from a portion of municipal property value taxes for a period of seven to 10 years.
Tax exemptions will only apply if there is a new improvement or alteration to an existing improvement. The minimum industrial/commercial new construction investment would be set at $500,000, while the minimum industrial/commercial renovation, alternation, or facade investment would be $20,000. The minimum investment values for downtown commercial property would be the same.
The maximum assessment exemption under the proposed bylaw would be the difference between the value of the land and improvement in the year prior to construction and the year in which the tax certificate first applies.
As an example, a $20,000 exemption on 2013 rates would yield an estimated tax savings of $671.26 for light industry property and $529.01 for commercial.
Coun. Donna Kropp supported the initiative, but raised concerns over the length of the program’s incentive and was in favour of lowering eligibility to five to seven years.
“This should be built in as an incentive not as a gift horse,” she said. “I think it should be there to provide the impetus for people to think ‘wow this is great, the district is in business for business, and we want that benefit.’ But if it’s dragging on and on, I don’t know if it’s got that same hammer as it did in the beginning.”
Medlock, who was involved in some of the discussions with AdvantageHOPE during the bylaw drafting process, said the time frames were determined in order to remain competitive with neighbouring jurisdictions.
The proposed revitalization tax exemption bylaw will be brought forward to council on Oct. 28 for approval of the first three readings.
If adopted, the goal is to have the program in place for the next construction season.