November 13th - 2009

Heritage property owners get tax relief

A number of Ontario municipalities have initiated programs to provide tax relief, grants and loans to heritage property owners.

A number of Ontario municipalities have initiated programs to provide tax relief, grants and loans to heritage property owners. Under the Ontario Heritage Act, municipalities can not only pass bylaws to formally designate properties of cultural heritage value or interest, but they also have the authority to offer financial relief to designated heritage property owners.

Thirty municipalities which range in size from Merrickville-Wolford, (pop. 2,867), to the City of Toronto, (pop. 2.6 million), have already instituted tax relief programs under the Act. Some municipalities also have, or are considering grant programs, where up to 50 per cent of the cost of approved repairs or refurbishing of heritage properties may be allowed. At a time when real estate taxes and the cost of property maintenance and repairs seem to be in an ever increasing upward spiral, it’s refreshing, if not downright unusual, to find some municipalities actually offering tax relief and grants to a growing segment of the real estate market.

Access funds and savings
The following is a brief outline of three programs that municipalities can offer to assist in the ownership, maintenance and rehabilitation of heritage properties. Knowledge of these programs can be a tremendous marketing tool in the hands of brokers and agents when listing or selling heritage properties.

Heritage property tax relief measure: Changes were made to the Municipal Act to allow municipalities to provide tax refunds or reductions to owners of eligible heritage properties. For example, municipalities can allow from 10 to 40 per cent in tax relief on eligible properties based on the municipality’s own program criteria. The province shares in the cost of the program by funding the education portion of the property tax relief.

Direct cash grants for rehabilitation and restoration projects: Under this provision of the Act municipalities may make non-refundable grants to owners for the purpose of protecting the heritage features of a property. The grants cover either the whole, or part of, the contract cost of alterations or repairs to a designated property on terms and conditions that the council prescribes.

In some municipalities grants are available for both residential and commercial properties. In others the two are specifically segregated and exclude either one or the other. Grants are for varying amounts, but generally there is a limit on each individual grant, based on joint financing of the project. For example, it may be on the basis of every dollar the owner contracts, the municipality will match it up to a certain maximum limit. In others, it may be on the basis of a grant of one dollar for every two provided by the owner. Generally an annual budget for funding the grant program is set by the council. Disbursement may be based on a first-come, first-served basis, or the merits of each proposal, or both.

Municipal tax back grants: Municipalities can also use their grant making powers to provide grants or loans to owners of designated properties for a limited period of time, to offset a municipal property tax increase which resulted from the alteration, repair or renovation of a property.

A Ministry of Culture information sheet shows that Cobourg, Kitchener, London and Perth, already use tax back grants to provide “Conditional Heritage Grants” to qualifying property owners. The amount of the grant is calculated to match the increase in property taxes that would result from these improvements to the heritage property.

Note that programs vary from one municipality to another and may exist in one, while not in another. If more authoritative information is required, reference should be made to the relevant legislation or to the municipal office in which the property is located. In all cases however, to be eligible for the programs the property must be designated under Part IV (individual property designations) or Part V (heritage conservation districts) of the Ontario Heritage Act.

These programs, where available, are tailor-made for the present market and can assist the broker or agent in listing and selling heritage properties. They compliment a growing interest in recycling older buildings. Tax savings are always of interest, and financial assistance in any form that will help preserve our most significant heritage properties is a win-win situation for all concerned.

Robert B. Hulley is a former real estate broker and a retired accredited appraiser. He is presently a member of the Executive Committee of the Architectural Conservancy of Ontario.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Manager, Media Relations

416-445-9910 ext. 246