After reviewing the procedure for granting permissive property tax exemptions, Creston town council voted on Tuesday to cap the total amount at 1.75 per cent of the local tax base.
Non-profit organizations that own or lease property in Creston that is used for the benefit of the community can request to be exempted from paying property taxes, which fund most services provided by the town. Applications for exemptions will considered every three years, and forms must be submitted by July 31 this year.
“A permissive exemption is the equivalent of a donation to an organization by all property taxpayers,” said Mayor Ron Toyota on Friday. “Council must operate with the awareness that as more exemptions are granted, taxes are higher for everyone else.”
Toyota proposed a 1.5 per cent cap on tax exemptions, but others at Tuesday’s committee of the whole meeting spoke in favour of a two per cent or higher level.
“We found a way to compromise,” he said. "The extreme options would have been to have no exemptions or to approve every application."
To qualify for an exemption, an organization must be charitable or non-profit, an athletic or service club, a care facility or private hospital. Statutory exemptions are made for places of public worship, cemeteries, libraries, Indian land, seniors’ facilities and hospitals.
Land and improvements exempted must benefit the community in one or more of the following ways: provide recreational facilities for public use, provide recreation programs to the public, provide programs and/or facilities for youth, seniors or other special needs groups, preserve heritage important to the community’s character, preserve an environmentally or ecologically significant area of the community, offer cultural or educational programs to the public that promote community spirit, cohesiveness and/or tolerance, and offer services to the public in formal partnership with the community.
By capping exemptions at 1.75 per cent, council members could be forced to deny organizations that were previously exempt, or prorate taxes to keep the total under the maximum. In 2012, 2.13 per cent of the total town property tax was waived.