Did you know that major developers in the South March Highlands are paying proportially less in property tax than you are on your residential city lot?
Ever wonder how developers can afford to hold large blocks of land for years in order to speculate on possible land development opportunities?
All this is done throught the magic of preferential rates for agricultural property taxes! Click on each of the tabs below to read the details.
You can see this for yourself by comparing the tax classes for property on the City’s property tax website. If you look up the Urban tax rate for Farmland, you’ll see that the rate is 0.230158% which for some inexplicable reason is actually lower than the Rural tax rate for Farmland (which is 0.244291%).
You will also see a low-cost entry for forest land that is only taxed at 0.230158%.
Most residential property owners are paying based on a rate that is over 4x more (1.090539%).
The purpose of a lower tax rate for farmers is to encourage vital agricultural production. A lower property tax rate recognizes that many acres of forest and farmland are integral parts of working farms that cannot be taxed at the same rate as a suburban lot without bankrupting farmers. Legitimate farmers need this tax break – however land speculators and developers clearly don’t!
However, to assist developers who have to re-zone lands from rural to urban in order to develop them, the City of Ottawa has for years gratiously allowed agricultural property taxes to be paid on lands zoned for urban development.
This allows a developer to buy-out a legitimate farm, survey it for a subdivision, apply for a draft plan of subdivision, clear-cut and change the grading of the land, build and sell houses, etc. without ever changing the tax rate until you or I buy a house from them.
At least two classic examples of this can be found in the SouthMarch Highlands. According to the Consent to Enter Agreements executed by the City between Richardson Ridge (owned in part I believe by Regional Group) and Uniform Developments (according to their web site partially owned by John MacDougall who also appears to have an interest in Richarson Ridge since he signed both these agreements) which both state:
“The City of Ottawa agrees that should use of the Land … result in a change to the current assessment of the Land, which is currently based on a rural farmland use, the City of Ottawa agrees to make appropriate representation to assist Richardson Ridge/Uniform in its appeal to any change in the assessment to the land which is claimed to be a result of [constructing Terry Fox Drive].
Should Richardson Ridge/Uniform fail in such appeal, the City of Ottawa agrees to pay Richardson Ridge any increase in taxes that result from the foregoing.”
What a sweet deal for these developers! Even though these lands were rezoned in 2004 and upheld in a 2006 OMB ruling as urban, these developers have been paying preferential property taxes as if they were the same struggling farmer that they bought the land from.
Not only that, the City of Ottawa will ensure that they never pay a dime more – no matter how much these lands are developed in future. Heck we’ll even refund them if anything slips through the cracks in the deal.
There is no Consent to Enter agreement for Urbandale since the conditions of subdevelopment approval require them to convey land for TFD to the City at no cost (since all these developers benefit from and in fact require this road to make their subdivisions viable). So we can’t easily determine whether or not Urbandale is benefiting from preferred taxes for farmland and forests, but it would seem unlikely that they would not also want to take advantage of the City’s largess with our tax base if they could too.
Most of us would expect that the tax break for farmland is available for only lands that are zoned rural (RR, RU), regardless of whether they are within the urban boundary or not.
Part 13 of the current Ottawa Zoning By-Law only provides for rural zoning in the Greenbelt and Rural Area. What city allows for farms within its Urban Boundary? This makes sense since what city-dweller wants to live next to cows and pigs? The farms that are already within the Greenbelt are already designated as being outside of the Urban Boundary, so the current By-Law already protects legitimate farmers.
The loophole can be plugged by removing farm and forest preferential tax rates from the Urban property tax ratings since they are not required (by legitimate farmers) within the Urban Boundary. If there are any freak cases of where an individual farmer, who is not a commerical organization, actually has a producing farm within the Urban Boundary, then the By-Law can be amended to allow for a rural zoning of that land. However, if that land is ever re-zoned as urban (a precondition for development approval), then the full tax rate should apply.
The time has come to plug the loophole that allows developers to avoid paying their fair share of property taxes! Perhaps we wouldn’t be hearing excuses from Larry O’Brien for not meeting his previous campaign promise of not raising taxes if everyone were paying their fair share.
Why don’t you write an email to Larry O’Brien and ask him if he wouldn’t have found it easier to balance the City’s Budget during the past 4 years if everyone were paying their fair share of taxes? And ask him why we should believe him that he can manage our tax base if re-elected when he has let millions of tax dollars slip through this loophole in the past?
You can also email to Jim Watson and Clive Doucet who are running for mayor and ask them if they will plug this loop hole if elected. While you’re at it, you might want to ask Jim Watson if he is still accepting campaign donations from Urbandale. (Clive Doucet is the only mayoralty candidate who doesn’t accept donations from developers.)
It’s time to send the message that the average taxpayer will no longer tolerate free rides for developers in the South March Highlands or anywhere else in Ottawa!