City to clean up rules on non-profits’ tax exemptions

Requests continually increase; placing burden on non-exempt properties

The city will be making changes to the rules governing property tax exemptions given to community groups and other non-profits.

Council, at its Monday meeting, approved amending the permissive tax exemption grant policy to provide better clarity around eligibility requirements.

The city’s Community Partnership Committee, which is tasked each year with evaluating applications for the tax breaks, is recommending changes that include changing the length of permissive exemptions, implementing a cap on the value of the exemptions, and placing some new conditions on the tax breaks.

Lesia Davis, chair of the Community Partnership Committee, wrote in a report to council that the city should cap permissive tax exemptions at 1.4 per cent of the general tax levy for each year.

“Requests for permissive exemptions are ever increasing, and while the granting of permissive exemptions does not directly affect the city’s budget, as additional tax exemptions are granted it places a heavier tax burden on the remaining non-exempt properties,” Davis wrote.

This year, 75 groups will receive permissive tax exemptions, totalling $755,901 while in 2015, more than $898,000 in tax exemptions were given to 74 community groups. In 2014, 69 grants were given, totalling $816,602.

Under the new changes soon to come, groups will only be eligible for permissive tax exemptions if they are not already receiving a grant-in-aid from the city, and vice-versa.

The Community Partnership Committee is also recommending that multi-year exemptions be capped at five years, and that benefitting groups enter into an agreement with the city to repay exempted taxes if the organization transfers the property.

“An agreement may be entered into requiring payment of the foregone tax revenue, should the benefitting organization sell or transfer the subject property to another organization, or should the property change uses such that the organization no longer qualifies for a PTE (permissive tax exemption),” Davis wrote.

The city’s permissive tax exemptions are designed to support non-profit community groups that add to Campbell River’s quality of life.

To receive the tax break, the group must be a not-for-profit or a charitable or philanthropic organization that benefits the community either through: recreation; providing programs that benefit youth, seniors or other special needs groups; preserving heritage important to the community; preserving an environmentally significant area; offering cultural or educational programs; or offering services to the public in partnership with the city.