OLDS — Town council has approved a tax break program designed to spur development of residential lots in the community.
The program provides cuts to municipal taxes only over three years, sliding from 80 per cent the first year, 60 per cent the second year and 40 per cent in the third year for any subdivision that creates seven lots or more.
Each year, administrative staff will bring a proposed tax abatement for each lot to council for approval.
Chief administrative officer Brent Williams said this program will cost the Town of Olds about $1,800 per lot over three years, although that will vary, depending on market conditions and size of lots.
But he suggested it’s a cost worth absorbing.
“Overall, this is largely income that the town has never had before, so we’re more foregoing potential income than we are losing existing revenue,” Williams said. “And again, it is something that we hope encourages developers in town to keep developing.
“We’ll have to work out the formatting because (it’s) mega-confusing: a lot of different schedules, different years the lots are on. But we don’t have a lot of residential development going on.”
Coun. Dan Daley asked for more details on how the program will work.
“The developer still owns that lot – John J. Investments, whatever it might be – if they keep those for three years, they will maintain the full tax abatement schedule,” Williams said.
“But if they sell to a homebuilder for instance, which is quite common, (they) will lose that eligibility.”
Williams said the wording of the program was carefully chosen to ensure it will be easy for municipal officials to track the situation with various lots.
Coun. Darren Wilson asked if this is a common tool to spur development in other communities.
Williams said it is becoming more common. He said some other communities may have varying tax cuts or length of programs, but generally, an 80-60-40 split is pretty common.
