Monday, February 9, 2015

Taxes on trailer destroyed by fire a hot topic at Town council and COTW

Remains of one of two mobile homes destroyed in Jan. 2014 fire
C. Davis file photo
C. Davis/T.Lucas

During the regular meeting of Pincher Creek Town Council on January 26, 2015 council reviewed a letter received from a citizen who owned one of the mobile homes that was destroyed by fire on January 14, 2014.  At issue was the 2014 tax bill for that structure, the remains of which were removed from the site.  The subject was also discussed at the February 4 Committee of the Whole meeting.

The owner of the property stated in the letter, dated January 16, 2015, that "When I received the bill for the taxes of this property, I was a little shocked at the amount I was proposed to pay. I thought that I would only have to pay for the 14 days the property was standing. I went to the town office and asked about this bill and was told that the bill was for 2013 property taxes. I thought it a little strange but paid the bill anyway." The citizen says in the letter that they have since enrolled in a Legal Assistant Course, and believes that the property should not have been assessed at this value. "I should have paid for property taxes of this property for the year 2014 should have been $47.59 (14 days x $1,240.65/365 days) and not the full amount of $1,240.65, which equals $1,193.06 is owed back to me for overpayment of 2014 property taxes."

"I ask that I be refunded the $1,193.06 that I overpaid for property taxes and that it be refunded within 14 days of review of this letter."

Town CAO Laurie Wilgosh told council "When they received their tax notice, they expected a substantial lowering of that tax notice. But it would not really be, because the assessment on the property, assessments are for 2014 are based on what was on the property on December 31, 2013." In the notes for the meeting administration states the 2014 property taxes are based on the characteristics and physical condition of the property on December 31, 2013. According to that statement, because the fire did not occur until January 14, 2014, the 2014 property taxes as assessed are correct.

Councillor Doug Thornton asked, theoretically, if someone replaced a mobile home circa 1957 valued at $6,000 with a mobile home valued at $100,000, on January 15, on the same lot, "Would the taxes be the same for the 1957 model for the whole year?" Councillor Tammy Rubbelke and CAO Wilgosh said that would be true. Wilgosh clarified that "This year's taxes are for 2015."

Mayor Don Anderberg said "There are not very many times where situations arise like this. It's tough enough losing your home without the extra burden of paying taxes for something that isn't sitting there." Council discussed that even if they were willing to forgive a portion of the taxes, this council could only affect the municipal taxes. "Just our portion," explained Rubbelke. There was a long discussion about rules, regulations, and the timeline. "It's more convoluted than that, though," said Wilgosh, "Because the value is based on July 31 of the year." Council asked administration to have an assessor come in to discuss the situation and legislation, at the companies earliest convenience.

"Too many rules," said Thornton.

The subject was also discussed at the February 4 Committee of the Whole meeting. Present to answer questions from committee members were Wayne Lamb and Ryan Vogt of Benchmark Assessment Consultants Inc. Benchmark is contracted by the Town to provide, among other things, property assessments and advice, guided by the Municipal Government Act (MGA). Lamb has advised the Town since 1998.  After explaining to the committee what it was that Benchmark did for the Town, the discussion turned to the destroyed mobile home.  According to Lamb and Vogt, mobile home parks are a grey area for assessors.  "We drive those (mobile home) parks every year, they're kind of a moving target," Lamb said (pun perhaps unintended) at one point during the meeting, saying it's often hard to know who has title to what, and that mobile homes sometimes come and go without clear notice being given.  "They're a little different than regular property".  He said Benchmark was dealing with a similar situation in Brooks.

Lamb recited from the MGA the following: "Each assessment must reflect the characteristics and physical condition  of the property on December 31st of the year prior to the year in which a tax is imposed under part 10."  He added his own clarification to the above.  "So the condition of that property at the end of each year is, as a general, what you pay taxes on for the following year."

"Now that fire there, as a general rule, if it was a house, it would have been assessable.  If you had that fire on January 1st you wouldn't take that off until the following year, but there's a little fly in the ointment here, and we stumbled across this...  We checked with Municipal Affairs, and what happens with  a mobile home is that there's a section 368 in the Act here, and it changes the taxable status of a property, and it's not very clear legislation."  According to Lamb, Benchmark checked with a representative of Alberta Municipal Affairs and were told that this was the section that applies in this situation.

The MGA also states in part:
Changes in taxable status of property 368 (3): If the taxable status of property changes, a tax imposed in respect of it must be prorated so that the tax is payable only for the part of the year in which the property, or part of it, is not exempt. ~ Municipal Government Act 
Lamb read from 368 (4) of the Act. "When a designated manufactured home is moved out of a municipality  ("I guess in this case it was moved to the dump", Lamb added),  (a) it becomes exempt from taxation by that municipality when it is moved and (b) it becomes taxable by another municipality when it is located in that other municipality". 

"So it could work in your favor as well, and this is why we're going to have to sit down and talk to Laurie (CAO Laurie Wilgosh) and Gus (Legislative Services Manager Gus Kollee), and we're going to have to maybe come up with a better way to track what's happening in mobile home parks.  Because if someone moves a mobile home into a park you can start taxing them immediately.  If it moves out you have to remove the tax immediately."

Lamb explained that municipalities can begin tax recovery claims after a year, speaking generally.  In this specific case he advised that the Town could "do a 305-3 correction on that".

 "And what that does is it removes it from your equalized assessment so that you're (the Town) not stuck paying the school portion of the (Provincial) taxes on that."  He said that with the Town's approval Benchmark would proceed with the process.

Councillor Doug Thornton clarified that it would be possible according to Lamb's information to give relief to the mobile home owner for the tax bill after the mobile home was destroyed.  Since the discussion was not directly related to an official Request For Decision, no formal vote was held on the subject, but the members of the committee seemed to be in general agreement that providing that relief was the desired direction to go in and indicated as much to Lamb, allowing Benchmark to proceed with their aspects of clearing up the matter.

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