Property owner says Windsor's plan to eliminate vacancy tax rebate won't fix problem

A Windsor developer says the city's plan to eliminate a property tax rebate for vacant buildings won't actually fix the problem.

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The province's Municipal Act directs cities to rebate property taxes by 30 to 35 per cent for the portion of the building that is vacant.

Earlier this year, the province announced it would allow municipalities to manage the rebate programs however they liked. 

In June, Windsor City Council approved a plan that would see the rebate for vacant downtown commercial buildings reduced by half during the second year of the vacancy, and eliminated completely in the third year. The rebate program would not change in the rest of the city, at least initially.

One of the motivations behind eliminating the rebate is that it could encourage property owners to find tenants to fill their buildings. 

While the Ministry of Finance has yet to sign off on the city plan, local developer Joe Mikhail is concerned what will happen if it is approved.

Mikhail says the vacancy rebate system stems from when separate property and tenant taxes were combined into a single property tax, paid by building owners. He argues eliminating the vacancy tax rebate amounts to a tax increase, and that property owners don't keep buildings vacant to receive a rebate.

Mikhail believes if the vacancy rebate is eliminated, owners will simply apply for a reduction in property assessment value or allow the property to be foreclosed. They may even simply apply to have the building demolished, as vacant lots are taxed at an even lower rate, he added.

"The end result would be a reduction in taxes to the municipalities. [Windsor] is not looking at the long term," he said.