“(I’m) really happy to see that. Hopefully we can narrow this gap even further. “
The tax differential between residential and commercial real estate will narrow again this year, with the residential taxpayers bearing slightly more financial burdens.
In its budget meeting in December, the city council approved an increase in the municipal tax of 2.96 percent. This was expected to bring in $ 880,730 in taxes, with $ 687,299 coming from residential and commercial real estate paying $ 193,431.
A report on the proposed tax policy presented by the city administration during the recent meeting of the Executive Committee explains that for this year the City Hall has made an analysis showing the impact of splitting the tax increase based on the percentage of taxable assessment of both property classes .
If both classes shared the tax increase, it would be split so that residential experiences a 3.50 percent increase and commercial experiences a 1.91 percent increase, before adjustments are made for the 2021 commercial appeal allowance.
“What we’ve been doing since 2018 is assign this (tax increase) based on the overall rating, not how we split the rating using mill rate factors,” Finance Director Brian Acker said recently during a board meeting.
If a residential property valued at $ 200,000 is currently paying X dollars, a commercial property valued at the same value would pay 2.30 times that amount, he pointed out. However, splitting the tax increase would reduce this tax gap to 1.88 times.
This change is mainly due to the fact that the state government changed the value percentages for commercial real estate from 100 percent to 85 percent, added Acker. This means that 85 percent of the values of these properties will be valued versus the full 100 percent.
The tax gap in 2017 was 2.59, while this year it will be 1.88, Coun said. Heath Eby. She thought that the good work of the council and city administration helped bring that number down.
“(I’m) really happy to see that. Hopefully we can narrow this gap further, ”she added.
If the state government had not changed the appraised value of commercial real estate, the tax gap would have fallen slightly to 2.20, Acker said.
“This is the movement I was talking about (with the table of business tax rates) that is trying to make the food chain a little better between communities and with the city of Regina in particular,” said Coun. Dawn Luhning.
“The smaller we can make this gap, that will help us creep up this graph. Hopefully we can see it is greater than 0.1 in the future, but it’s better than going the other way. “
The council then unanimously approved a recommendation to split the 2021 local tax hike into the residential and commercial and industrial property classes based on the percentage of taxable assets in each class. In addition, the apportionment would be achieved by adjusting the appropriate milling speed factors for each property class.
The recommendation will become official when the council approves it at a future meeting, likely on Monday June 14th during its regular session.