City of Edmonton approves tax program to prompt owners to clean up derelict properties

In an effort to get owners to clean up derelict properties, the City of Edmonton has approved a prorated tax forgiveness program.

Cate Watt, branch manager of assessment and taxation with the city, told media Wednesday that the program is intended to incentivize property owners on top of a new tax subclass which slaps derelict properties with a property tax rate about three times higher than normal.

The new tax subclass, which applies to dilapidated or unlivable homes in mature neighbourhoods, incentivizes owners to either fix their properties to meet minimum standards, or redevelop.  

The city has said the initiative includes securing vacant, derelict properties at risk of catching fire, clearing properties of debris and hazardous waste, and demolishing buildings assessed as unsafe in the surrounding community. 

"We've seen some really great success under the subclass so far, with more than 10 per cent of properties originally assessed as derelict now being demolished and a number more being cleaned up," Watts said. 

"Property owners, who do clean up their properties partway through the year can apply for a refund for the portion of the year that their property was cleaned up." 

For example, if a derelict home is demolished in May, this prorated tax forgiveness would mean that that property owner would pay the taxes at the higher rate, and then they would receive a refund.  Their net amount paid would be equivalent to the general residential rate after the demolition, Watt said. 

"We also recognize it's about fairness, so we're ensuring those who have done their part to clean up are recognized for those efforts and are no longer having to pay that higher rate." 

In February, the city assessed numerous derelict homes in neighbourhoods such as Highlands, Alberta Avenue, McCauley, Garneau, Glenwood, Queen Alexandra, Strathcona, Allendale and Westmount.

Between 2017 and 2020, 31 derelict homes cost the city $1.3 million in bylaw inspections, enforcement, safety and welfare checks. 

Coun. Anne Stevenson told CBC there is a balance in ensuring there is a strong message sent to property owners.

"It still provides that very strong financial incentive for property owners of derelict properties to demolish their buildings, while ensuring that ... We're not being punitive to people who have taken that action."

 "There's also a risk too, that if people are going to be paying that higher tax rate for the whole year anyway, they may not be in as much of a rush to demolish those buildings."  

The city says more than 200 properties have been assessed as derelict this year with 24 properties demolished to date.