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October 2, 2024
Today, City Council approved prorated tax forgiveness for derelict property owners. This represents an additional incentive for derelict owners to clean up their properties quickly, following the establishment of a derelict residential tax subclass last fall, the first of its kind in Canada.
Under the subclass, properties assessed as derelict are charged a tax rate that is approximately three times higher than the general residential rate. With this new policy, property owners can apply for a refund of the derelict residential property tax for the portion of the year that their property was cleaned up. For example, if a derelict house is demolished on May 1, this prorated tax forgiveness would mean the property owner would pay taxes at the derelict tax rate for January-April, and then would receive a refund so that their net amount paid is equivalent to the general residential rate for May-December.
“We’ve seen great progress from our residential derelict tax subclass in only one year, and this is another positive step,” said Cate Watt, Branch Manager of Assessment and Taxation. “Incentivizing property owners to clean up their derelict properties more quickly has a positive impact on community safety and vibrancy, and reduces the disproportionate amount of City costs associated with derelict properties for services like fire rescue response and bylaw enforcement.”
The policy will take effect immediately, allowing property owners who cleaned up their properties in 2024 the ability to apply for reimbursement of the additional taxes they paid this year. Derelict owners will receive more information with their tax notices on how to apply for the partial tax forgiveness when their properties are remediated. Of over 200 properties officially assessed as derelict in 2024, at least 23 were demolished. Assessments are being reviewed now in preparation for 2025.
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