CBS council to review how it collects taxes on ‘newly discovered’ land

By Craig Westcott   |   Vol. 31 No. 50 (February 27 2019)

The Town of Conception plans to review its policy on how to tax previously unregistered parcels of land following two debates in the chamber during the past month.

Deputy Mayor Richard Murphy raised the issue again at last week’s council meeting noting he wanted to clarify information that was reported after the previous council meeting.

“The Town is aware that there are parcels of land throughout the town that are not currently assessed on the tax roll and are therefore not receiving annual tax bills,” said Murphy.

But he added, the Town has made significant investments in technology and human resources over the past few years that coupled with the new GIS mapping system has enabled council to identify those lands.

“Once identified, staff then send the information out for supplementary assessment to the Municipal Assessment Agency to get the property onto the tax roll,” Murphy said. “At that point in time, ownership is not of primary consideration as we do have several parcels of land on the roll as ‘Unknown Owners,’ or we may know the owner but not have an accurate address to be able to reach them. The primary consideration is to get the property onto the tax roll to ensure that it’s being taxed properly.”

Murphy said the Town’s practice, once the owner is identified and reached, is to tax the parcel for the previous five years.

“It is important that property owners in the town are treated equitably and that land that has existed in the town since its incorporation be added to the tax roll and be taxed as all other pieces of property are that are within the town boundaries,” Murphy said. “The importance of obtaining a tax certificate when purchasing property cannot be stressed enough. This ensures that all taxes owing to a municipality are paid in full prior to the transfer of that property. It is important to remember that outstanding taxes are a lien attached to the property and can be transferred to the new owner if a tax certificate is not obtained prior to a sale or transfer.”

Murphy said that after the matter arose earlier this month during a vote on tax adjustments for a list of properties that included one that is being back-taxed, council’s finance committee reviewed the practice.

“Whether or not this is a fair way of doing it, or whether or not it’s right or wrong is up for discussion and debate,” Murphy allowed. “So in that light we have asked staff to go and have a look at the past practice with the possibility of developing a policy so that everybody is treated the same. And under this past practice, I can assure you that everybody is treated the same.”

Murphy noted the property which sparked the debate at the February 5 meeting, while being back-taxed for the previous six years, actually received a 100 per cent break on the interest that would normally have accrued on its bill.

Mayor Terry French encouraged the rest of council to have their say on the matter. Only councillors Darrin Bent and Kirk Youden responded.

“When the resolution came forward last week that included the resident who was going to be back taxed for six years for land that has never been on the roll here in CBS, I voted against it because I don’t agree with the procedure of back-taxing for six years for land not on the roll,” said Bent. “I don’t think that we can assert any kind of blame for the person who owns the land. That would take a long time to prove that they were hiding land – and why they would ever do that, no one knows. The truth is, if the land is taxed and it is open then it becomes valuable and it becomes an asset to the owner and the owner can sell it or develop it and so forth. But without it being on the roll, none of that can happen, of course.”

Bent said he welcomed Murphy’s call for a review of the “practice” and looked forward to the development of a “policy” regarding previously untaxed lands.

“Nobody was suggesting that anyone had been treated unfairly or that my voting against this was because I felt the resident was being treated unfairly,” Bent said. “It’s because I simply don’t agree with the practice of back-taxing people for six years for land that is not on the roll, that the Town wasn’t aware of and had not previously claimed taxes (on).”

Bent said the Town has not been doing anything improper, according to the Department of Municipal Affairs, in the way it levies back taxes on land.

“But just because we’re allowed to do it, doesn’t mean we should do it,” he argued. “And that’s something I look forward to debating with council as we hammer out a policy going forward, and hopefully we can come to some sort of agreement that will work out well for the people who come forward in the future with land that’s not on the roll, and for the Town itself.”

Bent pointed out the value of taxes on unregistered land is not calculated in the Town’s annual budget. “So, when it does come on the roll – whether we find it through mapping or people coming forward to register the land – quite frankly it’s a bit of a windfall,” he said. “So, I think we need to review this with that in mind.”

Councillor Youden argued that nearly every situation involving previously untaxed land is unique. “If people follow due legal process when they purchase land, or when it’s sold, then most times our systems pick up on it,” he said.

Youden added that 10 or 15 years ago, there was a lot of property in the town that simply wasn’t accounted for. “Through our GIS mapping we’ve picked up on a lot of it and we’ve consistently applied our approach,” he said. “What we want to do is create a situation where people pay for what they have, and I think that’s a fair process. Again, I think there should be some flexibility in terms of different situations that may evolve. In this case we were incredibly forgiving with regards to interest, probably more so than most. But at the end of the day, if we own property, we pay taxes on it and I would hope that we don’t lose that principle when we revise our policy, because now that some 90-odd per cent of our town is GIS mapped, this should be a problem that takes care of itself. It’s only when land is transferred from person to person that we need to have it reported to our finance department or to get a tax clearance certificate and then things like this don’t happen, we don’t miss things… We’re not trying to penalize or harm anybody, we’re just trying to get it right.”