YORKTON - If you are tardy paying property taxes in the future in Yorkton it is going to cost you more money. Yorkton Council unanimously approved higher penalties at its regular meeting Monday.
In May, 2012 Council passed a bylaw to provide for the prompt payment of taxes and the application of discounts and penalties, explained Raelyn Knudson - Assessment & Taxation Manager the city Monday.
Tax penalties are put in place for the following reasons:
*As an incentive for property owners to pay us. The penalties motivate payment, or encourage communication with us if they aren’t able to pay;
*They establish that we are a business that needs the tax revenue to operate. The majority of our income comes from the collection of property tax. Without it, we have to borrow funds to pay for our projects and the cost of borrowing has risen.
Penalties are currently charged at the rate of 0.5 per cent on balances remaining unpaid as of July 1st (current), and 0.5 per cent on each of the succeeding months. If the balance remains unpaid after December 31st of the year the taxes are levied (arrears), a penalty of one per cent is added on the first day of each month, said Knudson.
“According to a list of Saskatchewan City penalty rates compiled by the City of Weyburn earlier this year, Yorkton is listed as having the lowest rates in both categories,” she added.
The average current tax penalty rate in Saskatchewan cities is 1.46 per cent and the average arrears penalty rate is 3.14 per cent. Estevan has the highest, with a current rate of 3.5 per cent and arrears rate of 10 per cent.
Knudson sad the need for an increase was due to various factors.
“Over the last two years, the pandemic and the war have affected us all greatly. We have experienced demand running ahead of supply, supply bottlenecks and labour shortages, all of which resulted in increased inflation, and with inflation, there always comes a higher cost of borrowing,” she said.
As a result, city administration suggested a bylaw amendment to increase both penalties by one quarter of one per cent.
This bylaw sets out an amendment to increase each penalty by one quarter of a per cent.
“Even with the proposed increase the City will remain at the low end of the penalty list,” noted Knudson. “. . . The proposed amending bylaw is not meant to increase tax revenue. The intent of the penalty increase is to motivate timely payment of property taxes.”
The objective of the increased arrears penalty is to motivate people to borrow through a financial institution to pay their tax arrears, rather than leave their taxes unpaid, she reminded.
“We are not in the position to offer credit for services, which is essentially what is happening when taxes are left unpaid. We offer the same services to everyone, on the assumption that everyone is paying their taxes on time,” said Knudson.
The proposed bylaw will take effect July 1, 2023.
