The base rate from which the grant is calculated is the total amount of municipal taxes payable in the calendar year that City Council approves the financial incentives for the eligible works.
The total estimated value of the tax increment grant is $6,510. This represents 100% of the increase in the municipal portion of property taxes for a period of 5 years that is directly attributable to the increase in the assessed value of the property due to the new development. Once the project is completed, the property will be assessed by the Municipal Property Assessment Corporation (MPAC).The Downtown CIP stipulates that the grant cannot be more than the eligible costs. The applicant estimates $120,000 in investment to build the accessory dwelling unit containing a second residential unit. The grant represents approximately 5.4% of the estimated investment for this development.
| Estimate Property/Building Improvement Tax Increment Grant Calculation 773 Assumption | |||
|---|---|---|---|
| Year of Grant | Pre Development Municipal Taxes | Post Development Municipal Taxes | Estimate Value of Grant |
| 1 | $ 1091 | $ 2,393 | $ 1302 |
| 2 | $ 1091 | $ 2,393 | $ 1302 |
| 3 | $ 1091 | $ 2,393 | $ 1302 |
| 4 | $ 1091 | $ 2,393 | $ 1302 |
| 5 | $ 1091 | $ 2,393 | $ 1302 |
| Total Grant Estimate | $ 6510 | ||
Assumptions
- Current Property Value Assessment (2019 - Residential) $ 67,000
- Current Municipal Tax Levy (2019) $ 1091
- Estimate Post Development Property Assessment (Residential) $ 147,000 0.01628394
- Municipal Residential Tax Rate (2019)
- Estimate Post Development Tax Levy $ 2,393
- Total Estimate Eligible Costs $ 120,000
Because the Grant Program does not cancel taxes, the owner must pay the full amount of property taxes annually and will subsequently receive a grant for the difference between the pre and post-development municipal taxes. The City will retain the amount of pre-development (base) municipal taxes throughout the lifespan of the grant program; however will be foregoing any incremental property taxes which could otherwise be used to offset future budget pressures.
Consultations:
The Downtown CIP was subject to stakeholder and public consultation as part of the approval process, including public meetings, a statutory public meeting and circulation among internal City staff and the Province.