October 12, 2018
For Immediate Release
Jenny Motkaluk’s Plan – What Tax Reform Means to Homeowners
Affordability, certainty and home improvement incentives
highlight fresh new approach for owner-occupied property taxation
Today – In part two of her tax reform proposal, Mayoral candidate Jenny Motkaluk explains how individual homeowners, and in particular, retirees will benefit from her plan to cap her property tax rate at 1.16%, half of 2.33% being proposed by Brian Bowman. But her innovative plan will also streamline the building permit process and stimulate the home renovation trades sector given that owner occupied homes would not be subject to taxation at reassessed values until they are sold.
“Not only is the 1.16% tax rate more affordable but there are multiple opportunities in the reform that incentivize, rather than penalize, homeowners with an eye to home improvement and renovation,” explains Motkaluk.
Motkaluk’s property tax reforms target four key areas:
• Retirees on fixed incomes: will not be taxed out of their homes, as long as they live in it, even if the assessed value sees a substantial increase.
• People who buy ‘fixer uppers”: their taxes will not increase beyond the 1.16% annually just because they to choose to increase the value of a home needing major improvements or additions (owner occupied homes only).
• Infill property development: those wishing to improve or rebuild existing homes on existing lots in older neighbourhoods will no longer be discouraged by the threat of dramatic tax increases resulting from their efforts. Under the new system, the major disincentive to improve houses in our older neighbourhoods will be removed thus providing a significant stimulus of investment into existing infill properties vs. an “urban sprawl” effect or exodus from the city into bedroom communities.
• Building Permits: are supposed to be for safety and to ensure that building codes are met. However, they are currently integrated with assessment process and are undeniably used to flag home improvement and trigger a tax re-assessment whereby property taxes are inevitably increased, effectively punishing or penalizing the home owner. By removing the potential tax increases, the reforms will make it much more likely that everyone wishing to do major permit-required improvements, will no longer be deterred from adhering to the permit requirements which will result in more permit applications and less “underground renovation”. More home improvement projects will be inspected by our capable building inspectors, which means that more properties will be built to code, and that protects all of us.
“I spent 7 years serving on the city of Winnipeg Board of Revision,” says Motkaluk, “and that’s where Winnipeggers go to appeal their property assessments. My biggest take away from that experience was that our current tax system is broken because we punish the people who do the very things that we should be encouraging, which is to upkeep and improve their property.”
“And in the process, we create a substandard ‘underground renovation’ trade that evades inspections and flouts building codes. We need to stop driving the wrong behaviours and start encouraging the right ones.”
When asked to explain the process under which tax equity would be adjudicated, Motkaluk explained…
“We will use the authority that the city has to establish a tax rebate/credit program under section 219(1) of the City of Winnipeg Charter. We will calculate the tax owed for each house based on the current assessment formula and then apply a tax rebate to ensure that no owner occupied home has their tax bill increase by more than 1.16% as long as the ownership hasn’t changed in that tax year.”
In the end, Motkaluk’s new reforms, including the modest 1.16% annual increase, will raise the necessary tax revenue for the city but will end the undesirable behaviours and effects that our current tax system is causing…
1. The all too common tendency to allow property to degrade and decay to the point of becoming derelict.
2. The avoidance of applying for building permits.
3. Effectively punishing those who choose to play by the rules or invest in their principal residence by taxing them more.
“This plan isn’t about the number so much as it is about fundamentally reforming property taxation to restore the incentive for homeowners to invest in their homes.”
– 30 –
For more information, please contact:
David MacKay, Communications Director