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HomeMy WebLinkAboutCBRM Affordable Housing Property Tax Incentive Policy #CBflM14e---1(�44e--W-r6W Cape Breton Regional Municipality CBRM AFFORDABLE HOUSING PROPERTY TAX ADJUSTMENT POLICY 1. LEGISLATIVE AUTHORITY (1) This Policy derives its authority from Section 57(4) of the Municipal Government Act. 2. PURPOSE (1) The purpose of this Policy is to encourage and assist developers in the creation of new Affordable Housing Dwelling Units within the Municipality by providing an annual partial adjustment on property taxes. 3. STATEMENT OF POLICY (1) This Policy applies to Property Owners who create four or more new Affordable Housing Dwelling Units and agree to keep the units affordable for a period of 10 years. 4. DEFINITIONS "Actual Taxable Assessed Value" means the Taxable Assessed Value of the Affordable Housing Dwelling Units pursuant to the published assessment roll applicable for the taxation year in which the Tax Adjustment Eligible Assessment is to be determined, subject to any adjustments to taxes arising from assessment appeals or changes to the Taxable Assessed Value made by PVSC through requests for reconsideration. "Affordable Housing Dwelling Unit" means a dwelling unit for which the rent: • does not exceed 30 precent of the gross annual household income; or • is at 80% or less than the average market rent as defined by the Canada Mortgage and Housing Corporation (CMHC)for the Municipality. "Base Year Taxable Assessed Value" means the Taxable Assessed Value applicable for the taxation year in which a Tax Adjustment Agreement is signed for the eligible property upon which development is to be constructed or completed. "Canada Mortgage and Housing Corporation (CMHC)" is a Canadian crown corporation that serves as the national housing agency of Canada. "CFO" means the Chief Financial Officer of the Municipality; "Dwelling Unit" means one or more habitable rooms designed or intended for use by one or more individuals as an independent and separate housekeeping establishment in which separate kitchen and sanitary facilities are provided for the exclusive use of such individual or individuals, with a private entrance from outside the building or from a common hallway or stairway inside the building. For 1 CBRM AFFORDABLE HOUSING PROPERTY TAX ADJUSTMENT POLICY example, a dwelling unit can be a one-unit dwelling, one of two dwelling units in a two-unit dwelling, or one dwelling unit in an apartment building. "Municipality" means the Cape Breton Regional Municipality(CBRM); "Property Owner" means the person named on the assessment roll as responsible for the taxes for the eligible property. "PVSC" Property Valuation Services Corporation "Tax Adjustment Eligible Assessment" means the amount calculated using the following formula: Tax Adjustment Eligible Assessment=Actual Taxable Assessed Value- Base Year Taxable Assessed Value. "Tax Adjustment Agreement" means an agreement signed between the Municipality and the Property Owner under this Policy which defines the terms and conditions of the property tax adjustment and cannot be altered without prior approval. 5. TAX ADJUSTMENT AGREEMENT (1) The term of the Tax Adjustment Agreement shall not be greater than 10 years. (2) The Tax Adjustment Agreement must be registered on title. (3) The Applicant must agree in the Tax Adjustment Agreements to the following items: (a) the portion of the building or property that will be considered under the Tax Adjustment Agreement; (b) duration of the Tax Adjustment Agreement; (c) the process for reporting annually to the Municipality; and (d) to notify the Municipality if Dwelling Units cease to be considered Affordable Housing Dwelling Units in accordance with this Policy. (4) The Tax Adjustment Agreement signed by the parties will be substantially the same as the form agreement attached as Appendix A"to this By-Law and forming part of the By-Law. 6. AFFORDABLE HOUSING TAX ADJUSTMENT (1) A successful Applicant must sign a Tax Adjustment Agreement with the Municipality prior to any property tax adjustment being issued. (2) The Tax Adjustment issued through this Policy will be detailed in the Tax Adjustment Agreement. (3) The property tax adjustment shall begin on the taxation year after: (a) the issuance of an Occupancy Permit for Affordable Housing Dwelling Unit(s); and (b) the eligible property is first reassessed by PVSC to fully reflect the development that the Property Owner is receiving the property tax adjustment for. (4) The property tax adjustment may be provided that: 2 CBRM AFFORDABLE HOUSING PROPERTY TAX ADJUSTMENT POLICY (a) the Applicant provides a documentation to the Municipality confirming that each unit remains an Affordable Housing Dwelling Unit as defined by this Policy and subsequent Tax Adjustment Agreement. (b) there are no outstanding taxes,water rates, or other sums owed to the Municipality with respect to any property within the Municipality that is legally registered in the name of the Applicant; (c) there are no outstanding work orders and/or orders or requests to comply from any municipal or provincial entity; and (d) all other criteria and conditions are met of the Tax Adjustment Agreement. (5) All property tax adjustment will cease if during the duration of the Tax Adjustment Agreement if the building is demolished except to expand an eligible use. Tax Adjustment amounts that would have been payable in the year in which the demolition occurs will be adjusted on a pro-rated basis to reflect the date of the demolition and will cease thereafter. (6) If the Applicant beaches the terms and conditions outlined in the Tax Adjustment Agreement, the subject property shall be fully taxable in the year in which the breach of conditions occurs and in all subsequent years. (7) In case of an assessment appeal to PVSC, the Municipality reserves the right to withhold any forthcoming property tax adjustment pending final disposition of the appeal. (8) For Applicants on preauthorized payment arrangements, once the property tax adjustment has been processed, the total taxes levied, net of the adjustment for the taxation year must be paid no later than March 31. Failing this condition,the adjustment shall be reversed, and interest will be assessed on the balance owing. 7. PROPERTY TAX ADJUSTMENT AVAILABILITY (1) The property tax adjustment issued under this Policy is based on the amount of property tax collected on the increased taxable assessment resulting from a development containing Affordable Housing Dwelling Unit(s). (2) The property tax adjustment offered under this Policy shall only apply to the residential portion of any project the meet the criteria of Affordable Housing Dwelling Units outlined in the Tax Adjustment Agreement. (3) The property tax adjustment offered under this Policy shall only apply to properties containing four or more Affordable Housing Dwelling Units. (4) The CFO shall conclusively determine the portion of the development and individual Affordable Housing Dwelling Units used in the calculation Actual Taxable Assessed Value. (5) The Municipality will offer a diminishing property adjustment tax for on all new Affordable Housing Dwelling Units outlined in a Tax Adjustment Agreement for a period up to 10 years. The increase in property tax which results from all new Affordable Housing Dwelling Units shall be diminished by: • 90% municipal property tax in years 1-2 • 75% municipal property tax in years 3-4 • 60% municipal property tax in years 5-6 • 45% municipal property tax in Year 7-8 3 CBRM AFFORDABLE HOUSING PROPERTY TAX ADJUSTMENT POLICY • 30% municipal property tax in Year 9-10 8. ADJUSTMENTS BASED ON FILE ASSESSMENT In the event there are any subsequent changes in the total taxes payable in any year due to reductions resulting from assessment appeals, and where such tax changes occur after property tax adjustment amounts have been paid, future year property tax adjustment entitlements may be reduced accordingly. Any overpayment of property tax adjustment amounts arising from subsequent assessment or tax reductions will be deemed to be a debt owing to the Municipality. 9. APPLICATION REQUIREMENTS (1) All applications must be received by the Municipality by mail, in person, or by e-mail. (2) All applications must include: (a) legal names of the Property Owner(s) are required and if an Applicant is acting on behalf of the owner, property authorization from the owner of the property; (b) a copy of an approved Building and Development Permit issued in 2024 or later; (c) a summary describing the project, including: i. the total number of Affordable Housing Dwelling Units,and the approximate size and number of bedrooms ii. the address and location of the proposed development (d) verification to the satisfaction of the CFO that that the property contains four or more Affordable Housing Dwelling Unit(s) as outlined by this Policy; (e) documentation demonstrating that there has been an increase in the property tax assessment and showing the amount of the increase over the beginning year; (f) a valid email address for communication by the Municipality; and (g) any other information that may be required by the CFO, or delegate. 10. STAGE DEVELOPMENT In the case of a staged development, where one portion of a property is developed in advance of others, each portion of the property will be treated as a separate eligible property. The first property tax adjustment will be based on the Tax Adjustment Eligible Assessment arising from the increased assessment on the first portion of the development. As other portions of the eligible property are developed, and which result in further assessment increases, the Property Owner may apply to further participate based on the additional Tax Adjustment Eligible Assessment, subject to the continued availability of this Policy and the Property Owner's ability to meet the eligibility requirements and property tax adjustment entitlements in place at that time. 11. POLICY REVIEW OR REPEAL (1) This Policy shall be reviewed by the CBRM within six years of its coming into force to ensure the purpose of the Policy is still being met. (2) If this Policy,or any portion thereof, is repealed,any Applicant who has entered into a Tax Adjustment Agreement prior to the date of the repeal will continue to until the duration agreement has been completed be, despite its whole or partial repeal. (3) In the event of a repeal, the Applicants who are accepted into the program as of the date of the repeal, this Policy will continue to be in force and effect only for the limited purpose of providing for 4 CBRM AFFORDABLE HOUSING PROPERTY TAX ADJUSTMENT POLICY the continuation of the Tax Adjustment Agreement for those Applicants until the ten-year term is completed. Approved by Council:April 23rd, 2024 5 CBRM AFFORDABLE HOUSING PROPERTY TAX ADJUSTMENT POLICY APPENDIX A AFFORDABLE HOUSING PROPERTY TAX ADJUSTMENT AGREEMENT This AGREEMENT made this day of A.D. 20_ Between CAPE BRETON REGIONAL MUNICIPALITY, a body corporate and politic in and for the Province of Nova Scotia hereinafter called the"MUNICIPALITY" -and- [Property Owner Name], a property owner duly registered on the assessment roll of the Municipality, hereinafter referred to as the "Property Owner" WHEREAS, the Municipality has established an Affordable Housing Property Tax Adjustment Policy (the "Policy") to encourage and assist developers in the creation of new Affordable Housing Dwelling Units within the Municipality by providing an annual partial adjustment on property taxes; and WHEREAS,the Property Owner intends to create[Number] new Affordable Housing Dwelling Units within the Municipality and has agreed to keep the units affordable for a period of 10 years in accordance with the terms of the Policy. NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereby agree as follows: 1. Property Information Name of registered Property Owner: Address of Property: Property Identification Number(s): Mailing Address of Owner: Name of Agreement Recipient: Mailing Address of Recipient: 2. Term of Agreement The term of this Agreement shall commence on the date of execution and shall continue for a period 10 years. 3. Registration on Title The Property Owner agrees that the portion of the building or property identified in Section 6 shall only be used for the purposes of providing Affordable Housing Dwelling Units for the term of this Agreement, and that the agreement shall constitute a charge upon the land. 6 CBRM AFFORDABLE HOUSING PROPERTY TAX ADJUSTMENT POLICY 4. Assignment (1) The Property Owner covenants to the CBRM that if the Property Owner intends to sell, transfer or assign the Property or if for any reason the Property ceases to be registered in the Property Owner's name prior to the advance of all of the adjustment, the Property Owner will immediately notify the CAO in writing of such change or proposed change of ownership. (2) Property tax adjustments shall cease upon the sale, transfer or assignment of the Property, unless, prior to the completion of such sale, transfer or assignment, the Property Owner and the new Property Owner enter into an Agreement with the CBRM, in a form and content satisfactory to the CAO and the CBRM Solicitor, in which it is agreed that the new Property Owner shall have the right to participate in the Affordable Housing Property Tax Adjustment. 5. Definition of Affordable Housing Dwelling Unit For the purposes of this Agreement, the Property Owner shall agree that "Affordable Housing Dwelling Unit" shall mean a dwelling unit for which the rent: • does not exceed 30 percent of the gross annual household income; or • is at 80% or less than the average market rent as defined by the Canada Mortgage and Housing Corporation (CMHC)for the Municipality. 6. Terms of Tax Adjustment Agreement The Property Owner agrees to the following terms and conditions: (a) the portion of the building or property covered eligible for a property tax adjustment shall be m2; (b) [number of Affordable Housing Dwelling Units] are eligible for a property tax adjustment; (c) to maintain [number of Affordable Housing Dwelling Units] as an Affordable Housing Dwelling Units for the duration of this Agreement; (d) the rent charge for the duration of this Agreement shall be [select either does not exceed 30 percent of the gross annual household income or is 80% or less than the average market rent as defined by the Canada Mortgage and Housing Corporation (CMHC)for the Municipality] (e) provide an annual report to the Municipality confirming the rent charge for each Affordable Housing Dwelling Unit as defined by the Policy and this Agreement by [DATE] each year; and (f) to notify the Municipality if any Dwelling Units cease to meet the criteria of Affordable Housing Dwelling Units. 7. Property Tax Adjustment The Property Owner shall receive a property tax adjustment subject to compliance with the terms and conditions of the Policy and this Agreement. 8. Diminishing Property Tax Adjustment Based on the Policy, the increase in property tax which results from all new Affordable Housing Dwelling Units as identified in Subsection 6(b)shall be diminished for a period up to 10 years at the following rates: 7 CBRM AFFORDABLE HOUSING PROPERTY TAX ADJUSTMENT POLICY • 90% municipal property tax in years 1-2 • 75% municipal property tax in years 3-4 • 60% municipal property tax in years 5-6 • 45% municipal property tax in Year 7-8 • 30% municipal property tax in Year 9-10 9. Compliance The Property Owner shall comply with all requirements and conditions set forth in the Policy, this Agreement, and any applicable municipal by-laws or regulations. 10. Breach of Agreement In the event of a breach of this Agreement by the Property Owner,the property shall become fully taxable in the year in which the breach occurs and in all subsequent years. 11. Review and Appeals The Municipality reserves the right to review and withhold property tax adjustments pending the final disposition of any assessment appeals. 12. Policy Repeal In the event the Policy is repealed by the Municipality,this Agreement shall continue until its completion. 13. Dissolution of Agreement Either party may request to dissolve this Agreement by providing written notice to the other party. The requesting party must provide a valid reason for the dissolution request. Upon receipt of such notice, the parties shall enter into good faith negotiations to resolve any issues or concerns. If the parties are unable to reach a mutually agreeable resolution within [number] days of receipt of the notice, either party may seek appropriate legal remedies available under the law. Upon dissolution of the Agreement, any remaining property tax adjustments shall cease,and the property shall become fully taxable from the date of dissolution forward. 14. Schedule The following Schedule is attached to and form part of this Agreement: • Schedule A-Affordable Housing Property Tax Adjustment Policy 15. Notice Any notice required to be given by either party to the other shall be given in writing and delivered in person or by facsimile transmission to: (a) In the case of the CBRM to: Attn: Chief Administrative Officer, CBRM, 320 Esplanade Sydney, Nova Scotia BIP 7139 (b) In the case of the Applicant to: 8 CBRM AFFORDABLE HOUSING PROPERTY TAX ADJUSTMENT POLICY (c) In the case of the Owner to: Notice shall be deemed to have been received on the day of personal delivery or facsimile transmission if such day is a business day and delivery is made prior to 4:00 p.m. and otherwise on the next business day. The parties agree to notify each other immediately, in writing, of any changes of address from those set out above. 16. Entire Agreement This Agreement and the Schedule attached to it constitute the entire Agreement between the parties and there are no agreements collateral to it other than as referred to herein and no representations or warranties, express or implied,written or verbal, statutory or otherwise, other than as expressly set forth or referred to in this Agreement. 17. Municipal Government Act Nothing in this Agreement limits or fetters the CBRM in exercising its statutory jurisdiction under the Municipal Government Act, or under any other legislative authority or By-law and in the event that the CBRM decides to grant or deny any request or oppose or appeal any decision made pursuant to any such legislation, such action by the CBRM is not in any manner affected or limited by reason of the CBRM entering into this Agreement. 18. Governing Law This Agreement will be exclusively governed, construed, and enforced in accordance with the laws of the Province of Nova Scotia and the Owner agrees to attorn to the jurisdiction of the Province of Nova Scotia. 19. Waiver and Consent No consent or waiver, express or implied, by either party to or of any breach or Default by either party of any or all of its obligations under this Agreement or any amendment of this Agreement will: (a) be valid unless it is in writing and stated to be a consent or waiver pursuant to this Agreement; (b) be relied upon as a consent or waiver to or of any other breach or Default of the same or any other obligation; (c) constitute a general waiver under this Agreement, or (d) eliminate or modify the need for a specific consent or waiver pursuant to this section in any other instance. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. Cape Breton Regional Municipality(CBRM): By: [Authorized Signatory] Name: [Name]Title: [Title] Date: [Date] Property Owner: By: [Authorized Signatory] Name: [Name]Title: [Title] Date: [Date] 9