Report to: General Committee Report
Date: March 3, 2010
SUBJECT: Property Tax Relief – Markham Seniors
PREPARED BY: Paul Wealleans, Director Taxation
Ext
4734
RECOMMENDATIONS:
THAT this report be received for information;
AND THAT staff
be authorized and directed to do all things necessary to give effect to this
resolution.
This report provides a summary of property tax relief
programs currently available for seniors in Markham and provides potential options that
could be considered during the 2011 operating budget process.
At the
General Committee meeting of January
11, 2009, Mr. Sidney Sokoloff, a senior
from Thornhill, made a deputation to committee
regarding property taxes for seniors over 80 years of age. Committee directed:
“That the deputation by Mr. Sokolof,
resident, regarding property taxes of seniors over eighty be received; and
further
That staff look at options for the 2011 budget with
respect to assisting seniors with property taxes, and report back to General
Committee”.
Markham seniors
currently have access to three property tax relief programs: Town of Markham’s Annual Tax
Increase Deferral; Ontario’s
Senior’s Homeowners Property Tax grant; and, Ontario’s Property Tax Grant. The following sets out the various property
tax relief programs for seniors currently available by the Town of Markham, other York
Region municipalities and the Province
of Ontario.
Deferral
Program
The province requires all Ontario municipalities
to have in place a “property tax deferral” program. It was implemented
following the 1998 province-wide reassessment and was put in place to assist
seniors with tax increases due to the reassessment. The program defers annual
tax increases for seniors. The deferral must be repaid upon sale of the
property. No interest is charged. The program’s criteria and enactment is the
responsibility of York Region with input by the nine lower tier municipalities
and is implemented by the lower tiers.
The following summarizes the deferral
program that is place in Markham.
The criteria was updated and adopted by York Region Council in 2008 and does
not change without the approval by the Region.
Town
of Markham
1. The deferral
applies to the total annual budget and assessment related tax increase for
lower, upper and school purposes;
2. Seniors 65
years and older can apply for a deferral of the full annual tax increase. Proof
of age and residential ownership as of January 1st of the year under
application are the only requirements.
Seniors 55 to 64 years of age with a
maximum income of $23,000 for a single and $40,000 for a couple are eligible
for a tax deferral in excess of $100 (eg, the first
$100 tax increase must be paid and anything over is eligible for the deferral);
For comparative purposes, the latest
GTA wide data is 2007. The program take up in Markham for 2007 was 11 applications with a
total deferred amount of $1,100. Region-wide, there were approximately 118
applications with a total deferral of $31,000. Vaughan has a similar number as Markham while the largest
number of the deferrals is from Richmond
Hill.
Grant
Programs in Other York Region Municipalities
In addition to the deferral programs,
three municipalities in York Region have additional grant programs. The grants
are a fixed amount so a qualified senior receives the full amount. The
following reflects 2009 figures:
·
Vaughan: annual grant of $290 per
household. There were 1,372 applicants for a total cost of $397,880;
·
Richmond Hill: annual grant of $265 per
household. There were 387 applicants for a total cost of $102,555;
·
Newmarket: annual grant of $209 per
household. There were 66 applicants for a total cost of $13,794.
The criteria for the three
municipalities are similar. The applicant must be 65 years of age or older, own
and reside in the municipality and must be in receipt of the federal
government’s Guaranteed Income Supplement (GIS).
The grants are limited to one per household and increase annually at the same
rate as the annual municipal tax rate increase.
Province of Ontario: Senior’s Programs
In addition to the municipal deferral
and grant programs (where available), the Province of Ontario
has two additional programs that provide property tax relief for seniors. Both
programs require an application to be included in the annual Provincial Income
Tax return.
They are the (1) Senior Homeowners
Property Tax Grant program, and; (2) Property Tax Grant program.
(1) Senior Homeowners Property Tax Grant
·
Annual Grant provided to low-middle income seniors
who own their homes.
·
2009 maximum grant: $250;
·
2010 and subsequent years, maximum grant: $500;
·
Seniors may be eligible for the Property Tax Grant in
addition to the Senior Homeowners Property Tax Grant.
2010 Eligibility:
The following conditions must be met as of December 31st, 2009:
·
Must have filed a 2009 personal income tax return;
·
64 years of age (or older) and a resident of Ontario;
·
Owned and
occupied your principal residence on December 31, 2009 for which you property taxes
in 2009.
Income
/ Amount of Grant:
·
Single seniors with income of less than $35,000
qualifies for the maximum $500 grant;
·
Single seniors with incomes between $35,000 and
$50,000 receive a proportionately smaller grant;
·
Senior couples with combined incomes of up to $45,000
receive the maximum $500 grant;
·
Senior couples with combined incomes between $45,000
and $60,000 receive a proportionately smaller grant.
(2) Property Tax Grant
·
Based on occupancy in Ontario, either ownership or
rental
·
Maximum credit for seniors is $1,025 based on receipt
of :
·
Old Age Security
(OAS) – Federal, and/ or;
·
Ontario Guaranteed Annual Income System (GAINS), and
/ or;
·
Guaranteed Income Supplement (GIS).
The credit is based on occupancy cost – that is, property
tax paid or 20 per cent of rent paid for the year. Non-seniors can claim up to
$250 plus 10 per cent of occupancy cost and seniors can claim up to $625 plus
10 per cent of occupancy cost.
The amount received depends on the age and adjusted family
net income. The Property Tax Credit cannot exceed occupancy cost and is subject
to a maximum of $900 for non-seniors and $1,025 for seniors. Municipal and
provincial programs can be combined so that a senior could receive benefits
from all programs if offered in their municipality.
The table below shows a comparison of
tax relief programs across selected GTA
municipalities:
Table 1:
Seniors Property Tax Assistance – Selected GTA Municipalities
|
Municipality
|
Deferral
|
Grant
|
Eligible
for Both
|
2007 Cost
|
Criteria
|
|
|
York Region
|
Yes
|
No
|
No
|
$31,000
|
* 65 yrs: full tax increase
|
|
|
* 55 to 64 yrs: tax increase over $100
|
|
|
* Max income: $23K / $40K
|
|
|
Vaughan
|
Yes
|
$290
|
Yes
|
$397,880
|
* 65 yrs & GIS
|
|
|
|
Richmond
Hill
|
Yes
|
$265
|
Yes
|
$102,555
|
* 65 yrs & GIS
|
|
|
|
Newmarket
|
Yes
|
$209
|
Yes
|
$13,794
|
* 65 yrs & GIS
|
|
|
|
Markham
|
Yes
|
No
|
No
|
$1,100
|
* Same as York
|
|
|
|
Peel Region
|
Yes
|
No
|
No
|
$20,000
|
* 65 yrs and GIS
|
|
|
* Tax increase over $100
|
|
|
Mississauga
|
Yes
|
$500 (1)
|
Yes
|
$22,500
|
* 60 yrs & Ontario
Works
|
|
|
* 65 yrs & GIS
|
|
|
Brampton
|
Yes
|
$300
|
Yes
|
$340,000
|
* 65 yrs & GIS
|
|
|
|
Durham Region
|
Yes
|
No
|
No
|
Unknown
|
Unknown
|
|
|
|
Oshawa
|
Yes
|
$250
|
Yes
|
$250,000
|
* 65 yrs & GIS
|
|
|
|
Halton Region
|
Yes
|
No
|
No
|
Unknown
|
* 65 yrs: assessment related tax increase
|
|
|
* Max income: $40 K
|
|
|
Oakville
|
Yes
|
$275
|
Yes
|
$55,000
|
* 65 yrs
|
|
|
* Max income: $25 K
|
|
|
Toronto
|
Yes
|
Tax cancellation of full increase
|
Yes
|
Cancel: $500,000
|
Cancellation
|
|
|
* 65 yrs
|
|
|
* Max income: $26 K
|
|
|
Deferral: $321,000
|
* Max CVA: $454 K
|
|
|
Deferral
|
|
|
* 50 yrs
|
|
Notes:
(1) 2007 is
the latest year for complete data.
(2)
Mississauga’
program is an annual loan program.
For most of
the programs noted above, there are generally two common criteria: the
applicant must be a minimum of 65 years of age or older and be in receipt of
the Guaranteed Income Supplement (GIS).
Some municipalities provide assistance for those less than 65 years of
age. Only the City of Toronto has a program that is an outright
cancellation of taxes for seniors.
With respect
to Mr. Sokolof, he would currently be eligible for a
deferral and possibly a grant and or credit under the two provincial government
tax relief programs depending on his income.
Potential Options for Inclusion in 2011 Operating
Budget:
Should the Town of Markham wish to provide additional property
tax assistance to seniors, it could consider a grant program similar to other
municipalities.
One of the considerations that is always a factor in establishing a grant program is the
possible setting of a precedent. If a benefit
is provided to one particular group or organization, similar groups or
organizations may also request similar treatment and the ability of the
municipality to adequately resource it becomes critical.
The tax deferral program currently in
place in Markham
was established by the Province as mandatory with the intent that tax increases
could be eased by deferring the annual tax increase. It is likely that the
Province required a deferral program because while it does ease the tax burden
for seniors, it is not a direct cost to municipalities, as is a grant program.
The uptake for a deferral program has been minimal not only in Markham but in most other Ontario municipalities surveyed. While this
mechanism is an opportunity for seniors to offset tax increases, it is clear
that adding a lien to their home to be discharged upon change of ownership is
not palatable to the majority of seniors. A deferral program is not one that seniors take advantage of in great numbers. If the intent of
a program is to provide assistance and it is a program that the target group
does not access, its appropriateness and value might need to be reviewed or
alternatives considered.
Possible
Seniors Grant Program in Markham
The possible implementation a
seniors’ grant program in Markham
would need to take a number of factors into consideration:
·
Number of seniors owning property; in particular, the
number of seniors in age groups 55 years to 65 years and the number over 65
years, should a two stage grant program be envisaged (eg.
A lesser amount for younger seniors or those with a higher income);
·
“Baby boomer” impact. As a majority of the population
ages such a program may have a significant uptake and therefore future longer
term financial impacts;
·
Resourcing – ability of
the Town to fund it and the cost to administer a program without additional resourcing; eg). Vaughan annually must verify and process
1,100 applications;
·
Tax rate impact: any grant program will become an
additional line item in the annual operating budget;
·
It is critical that all facets of such a program be
reviewed and carefully considered prior to any potential implementation.
However, should Council wish to
consider a possible grant program for seniors effective 2011, the following
criteria could be included:
Proposed Criteria for Potential Seniors Grant
The following conditions must be met as of December 31st, 2010:
·
65 years of age (or older) and a resident of Markham;
·
Only one grant per residence;
·
Owned and reside
in a principal residence on December 31, 2010
for which property taxes were paid in 2010;
·
Property tax account must not be in arrears;
·
Must be in receipt of the federal government’s
Guaranteed Income Supplement (GIS).
The above criteria are similar to
most other municipalities that provide a seniors grant. The requirement for GIS
is also included in most other municipalities as the GIS is
the broadest income supplement offered by a senior level of government.
Based on the Municipal Property
Assessment Corporation (MPAC) 2010 Assessment file, Table 2 has been developed
that outline possible grant options and costs. It includes an analysis of
providing annual grants at the $100, $200 and $250 levels at the corresponding
age groups, with no income test:
Table 2:
Total Number of Homes Owned by a Senior
(Reflects
only the number of homes even if more than one senior resides in it)
|
Total Number of Senior Households
|
|
Applicant
Age
|
Grant: $100
|
Grant: $200
|
Grant: $250
|
|
Property
Count
|
Grant
Cost
|
Property
Count
|
Grant
Cost
|
Property
Count
|
Grant
Cost
|
|
55 – 59
|
10,563
|
$1,056,300
|
10,563
|
$2,112,600
|
10,563
|
$2,640,750
|
|
60 – 64
|
8,930
|
$893,000
|
8,930
|
$1,786,000
|
8,930
|
$2,232,500
|
|
65 – 69
|
5,630
|
$563,000
|
5,630
|
$1,126,000
|
5,630
|
$1,407,500
|
|
70 – 74
|
3,812
|
$381,200
|
3,812
|
$762,400
|
3,812
|
$953,000
|
|
75 to 79
|
2,734
|
$273,400
|
2,734
|
$546,800
|
2,734
|
$683,500
|
|
80 +
|
3,209
|
$320,900
|
3,209
|
$641,800
|
3,209
|
$802,250
|
|
65 to 80+
|
15,385
|
$1,538,500
|
15,385
|
3,077,000
|
15,385
|
$3,846,259
|
The table above provides an estimated
impact of the tax relief that could be offered to senior property owners in the
Town of Markham.
Based on the criteria above, only seniors 65 years of age
or older would be eligible for the grant. However, seniors would also need to
be in receipt of the GIS. Although annual grants of $100, $200 and $250 were
included in the analysis, staff have selected the
middle grant - $200 – for discussion. Table 2 (above) shows 15,385 homes owned
by seniors 65 years or older. The criteria of GIS receipt will reduce the
eligible number of seniors and ensure that those seniors most in need are
eligible. The experience in Vaughan with its grant program indicates
eligibility of between 10% to 20% of seniors over 65 years
so that if we assume the high range of 20% eligibility, the cost to Markham is
estimated at $615,400 or 0.60% tax rate increase for a $200 grant, calculated
as follows:
The Region of York has also researched the potential take
up or eligbility of seniors over 65 and the connection between low income
seniors and home ownership is not well documented. Any estimate of possible
take up must be considered as an illustration and for discussion pruposes. Our estimate of a 20% take up or eligibility should be
considered in that light.
Mr. Sokolof requested that assistance be provided to those over
80 years. There are 3,209 seniors over 80 years who own a home and with 20%
eligibility, the 80years + program results in 641 eligible seniors and would cost Markham an estimated $128,360
or 0.12% tax rate increase.
Additional
funding assistance might better be provided by senior levels of government that
have access to progressive income redistribution tax bases compared to
municipalities that have limited revenue sources.
As part of
the 2011 budget considerations, staff will review the feasibility and these
options for additional property tax relief for seniors.
For the 2011 Operating Budget, and based on a $200
annual grant and a take-up of 20%, the cost to provide grants to seniors over
65 years of age is estimated to be $615,400 or a 0.6% increase to the Town’s
tax rate.
None
None.
Q:\Finance\SHARED\2010 General Committee Finance\1005
Property Tax Relief - Seniors.doc
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