Wednesday, October 27, 2021

New policy places limits on permissive tax exemptions

One of the ways that municipalities can support non-profit organizations and churches is by giving them a permissive tax exemption. Organizations with permissive tax exemptions do not pay property tax.

In Langley City, we grant permissive tax exemptions in an ad-hoc fashion. Granting a permissive exemption results in a slight tax increase for other property taxpayers. Because of these reasons, Council passed a new permissive tax exemption policy at its last meeting.

This new policy will cap permissive tax exemptions to no more than 1.4% of the City’s total property tax revenue. Once this 1.4% limit is reached, all organizations with permissive tax exemptions will see their exemption scaled back by an equal percentage.

In 2022, the City will grant $423,308 in permissive tax exemptions, which equals about 1.35% of total property tax revenue.

The new policy will also limit permissive tax exemptions to no more than $75,000 per individual property.

The largest permissive tax exemption Council approved for 2022 was $63,795 granted to the Roman Catholic Church.

Organizations will now have to submit a new property tax exemptions application form by July 15th each year to be eligible to receive a tax exemption the following year.

In 2023, the new policy will likely result in a scaling back of permissive tax exemptions, and the Roman Catholic Church may hit the $75,000 limit.

No comments: