City of Kingston looking to cut vacancy tax rebate

First introduced in 2001, Ontario’s vacancy tax rebate was imposed by the provincial government to lessen the burden on landlord’s who had to pay the former business occupancy tax.

But in 2017, the province left the decision up to the individual municipalities whether or not to offer the tax rebate. In Kingston, the program includes a 30 per cent rebate for commercial space or land, and then a 35 per cent reduction for vacant industrial space.

More than a dozen cities have or plan to discontinue the vacancy rebate program, while two more are still debating the issue. Now it appears the City of Kingston is also mulling over the value of the rebate program.  

“It’s felt that there are a number of other opportunities that are available to property owners to be compensated for vacancies,” Jeff Walker, manager of taxation and revenue for the City of Kingston, said. 

Walker estimates that axing the tax rebate would result in nearly $1 million remaining in city coffers, from the roughly 180 applications the city receives each year.

Some downtown business owners would be happy to see the rebate program discontinued if it means fewer “For Lease’ or signs on Princess Street.

“Taxes are a really good program for promoting or demoting something,” Colin Morris, co-owner of FrameWorks said. “We’re rebating owners of properties that have a vacancy. So are we trying to promote vacancy?”

The final report, along with a recommendation from city staff, is expected to appear on a council agenda in April.