The city currently taxes multi-residential properties with more than six units at 1.7 times the rate levied on other residential properties.
On Monday, representatives from Ottawa’s rental housing industry, as well as tenant advocacy organizations, asked councillors on the city’s audit, budget and finance committee to lower that ratio.
Armed with case studies, tables and charts, they argued tenants in multi-residential properties pay a higher tax rate than homeowners.
On the other side of the debate, city staff presented figures they said showed the average apartment unit is taxed less per square foot than the average condominium.
Councillors ultimately endorsed the staff recommendation to maintain the existing ratio.
“I’m satisfied rental properties have been taxed and will continue to be taxed at a rate lower than residential,” said Mayor Larry O’Brien, who called the examples presented by the industry representatives “anomalies.”
The recommendation goes before full council for approval next month.
One of the key points put forward by city staff is a comparison of the taxes on condominium units versus multi-residential properties.
The median multi-residential unit faces $1,260 in annual property taxes, while the smallest and most modest condominiums pay only $1,330.
However, that incorrectly assumed condos and rental units are similar, countered John Dickie, chair of the Eastern Ontario Landlords Organization, which represents the owners and managers of more than 36,000 rental units in Ottawa.
He notes condos are generally newer, better finished, feature more amenities and are in better physical condition.
“The typical apartment is lower in quality,” added Barry Nabatian, the general manager of Market Research Corp. who appeared before the committee on behalf of Paramount Property Management Inc.
He gave the example of two side-by-side high-rises on Bathgate Drive that were both built in 1977. One contains condos, the other apartments.
Despite being assessed at a higher value, the per-unit condominium tax bill was actually 37 per cent less than the apartments.
Asked to respond to Mr. Nabatian’s findings, Ken Hughes, the deputy city treasurer of revenue, said individual inequities are likely because “tax policy is a very blunt tool.” All of the various types of properties across Ontario are grouped into only seven major classes and a few sub-classes, his report notes.
Following an overhaul of Ontario’s tax system, Ottawa’s multi-residential ratio was set at 2.3359 in 1998. City staff say the decreases since then means Ottawa now has the second-lowest multi-residential ratio among Ontario urban centres.
Mr. Dickie said a multi-residential tax ratio of 1.3 would lead to an equal tax burden. Coun. Alex Cullen, who is running for mayor in this fall’s election, put forward a motion that would have reduced the ratio to 1.6, which would have added roughly $15 to the tax bill of the average homeowner.
That motion was soundly defeated, as several councillors said they were unwilling to increase property taxes on other residents.
“The tax payers in our city have had it,” said Coun. Jan Harder.
