Some low-income homeowners in Cape Breton to get tax relief

Low-income homeowners in Cape Breton Regional Municipality are getting a bigger break this year.

Council has increased the low-income residential property tax rebate by $100and raised the threshold to make it easier for homeowners to apply for tax relief.

A hike in the minimum property tax rate is expected to more than offset the cost of increased tax exemptions.

Those aspects of the tax-exemption policy were revised earlier this year after remaining essentially unchanged since amalgamation in 1995, said Jennifer Campbell, CBRM's chief financial officer.

"It's been a long time since the low-income tax exemption policy has been looked at," she said.

"Our thresholds were unreasonably low, as well as the exemption amount was among the lowest across the province, so we knew it was time to update the policy."

Municipality increases exemption amount

Council increased the minimum residential property tax from $400 to $500 in this year's budget and raised the low-income threshold to allow more homeowners to qualify for the exemption.

The municipality also increased the amount of the exemption from $125 to $225.

"We realized that the increase in the minimum tax was going to be a hardship for some individuals, so the increase in the low-income tax exemption program ... offset that increase, so that those who needed help the most with the low-income program were able to access it," said Campbell.

In some cases, the same property owners paying the minimum tax also need access to the low-income exemption, but not in all instances, she said.

The change was made this year after staff reviewed the low-income exemption program and were surprised by the results.

"We've been looking at the uptake to the program over the last number of years and there has been a steady decline," Campbell said. "In fact,over the last five years, we have seen a 50 per cent reduction in the uptake of the program.

"Knowing our tax situation here at the municipality we knew that it wasn't that folks didn't need the program. We knew that they were just getting squeezed out of the program because of our unreasonably low income thresholds for the program."

Finance department analysis shows the increased minimum tax more than doubled the number of properties affected, increasing the number to 2,244 who are paying the minimum tax this year.

That will bring in an extra $200,000 in revenue. On top of the $40,000 budgeted for low-income tax exemptions, the municipality is prepared to handle more than triple the number of applications for low-income exemptions.

Still some unknowns

But officials won't know how many actually qualify until after the Dec. 31 deadline to apply for low-income exemption.

Since 1995, a property owner with a family income of $17,500 or less was eligible for a $125 exemptionand those with a single income of $14,500 or less also qualified.

Now, the threshold is tied to the income level used to determine federal old age security, which is currently $23,616 or less, and the property owner qualifies for a $225 exemption.

Because it's tied to the federal seniors' income level, the amount is indexed and will change annually along with the OAS and guaranteed income supplement thresholds.

The province also uses that threshold for its property tax rebate for seniors, which covers half of the previous year's property taxes up to $800.

For the first time, the municipality has begun promoting the low-income tax exemption. It's mentioned on social media and is outlined on the back of recent property tax bills.

It likely wasn't well known because it was "buried" in the CBRM's tax rules, said Campbell, but now it's a standalone policy.

The increased minimum tax is expected to generate enough money to cover the expected increase in exemptions, she said.

However, applications for the exemption have only begun to come in and the deadline to apply is the end of the year. If the money doesn't get used for exemptions, it'll be spent on something else.

'Hoping that there's a lot of uptake'

"I'm hoping that there's a lot of uptake," said Campbell. "I know that there's a need in the community for it, and we have the budget capacity to process it, so if it's not going to be used, then we're going to have to reallocate that budget somewhere."

But it's not clear what will happen if the municipality gets more than the expected number.

"Well, that's an interesting question," Campbell said. "That's something that we'll have to wait and see."

It doesn't sound like a lot, but a little help can go a long way, said Bernie LaRusic, vice-president of the Cape Breton Seniors and Pensioners Council.

However, he said, homeowners need to know tax relief is available, even if it's only an extra $100.
"Oh, it would be welcome news, that's for sure, and if the communication goes well, all the people who benefit from it, there's no negative side to that," LaRusic said.

"If somebody gives you $100, you're happy. It's much better than spending it. So yes, it's a little bit to a whole lot of people."