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Town of Banff approves deferral for penalties on late tax payments

Banff's property tax due date is July 15, but any penalties on late tax payments will be deferred until Aug. 31
Banff Town Hall 2
Banff Town Hall

BANFF – Tax bills for residents and businesses will be sent out June 15.

Town of Banff officials say the tax due date is July 15, but any penalties on late tax payments will be deferred until Aug. 31.

“That’s a month-and-a-half after the actual due date and penalties of 1.5 per cent per month would then resume starting Sept. 1,” said Chris Hughes, the Town’s director of corporate services.

“We are encouraging people who can still pay their taxes on the due date to do so.”

In response to the economic fallout of the COVID-19 pandemic, the Alberta government in April asked municipalities to provide a six month deferral of non-residential education property taxes.

However, Hughes said announcement was made with very few details at first.

“Then in consultation with municipalities, they realized the implementation of the deferral would have been nearly impossible for most municipalities given the limitations of our financial software programs,” he said.

“So we went back to the drawing board, and in consultation, came up with some options that would meet the spirit of the deferral.” 

The first option was to defer six months worth of non-residential education property taxes from April 1 to Sept.30, with no obligation for municipalities to defer any municipal property taxes.

However, the Town of Banff preferred the second approach, which is a combined municipal and and education property tax deferral that is effectively equivalent to deferring six months worth of property taxes. 

In order to determine the length of the required penalty deferral, a calculation was made based on the amount of the non-residential education property taxes as a percentage of the total non-residential taxes. 

“In our case, the education tax levy makes up approximately 25 per cent of an average non-residential property’s tax bill,” said Hughes.

“We took the six month deferral, multiplied it by that 25 per cent to come up with a one-and-a-half month deferral of all taxes that would equal in spirit the deferral of the six months.”

Councillor Chip Olver voiced support for all the work being done to financially help businesses and residents during COVID-19, but was concerned for the municipality’s cash flow.

“As we do that for others, how are we ourselves managing our own municipal cash flow?” she said.

Hughes said the are no immediate concerns, noting he gets daily updates on the Town’s cash flow situation and there has been a revised cash flow forecast for the year.

“Luckily, we actually had a fairly good reserve on hand and have nearly $5 million in investments that we haven’t had to draw on yet,” he said, noting funding from debenture applications three major capital projects are coming in this month too.

“As of right now, we are managing our cash flow very well.”

Banff taxpayers will see a 7.6 per cent drop in their overall property taxes this year compared to 2019.

An average residential dwelling assessed at $451,100 would see an annual decrease in overall taxes of $157, whereas an average commercial property assessed at $6.55 million would see a drop of $6,898.

Changes in tax bills are average and don’t reflect individual property tax changes.