Local Area Service Taxes
A municipal council may, by bylaw, provide for services to only a portion of the municipality (i.e. a local service area). The tax levied within this area is referred to as a local service tax.
Local Service Taxes
A local service tax is a property value tax or parcel tax levied over a "sub-area" of a municipality (e.g. a neighbourhood within a municipality). Learn more about:
A municipal council may establish a local area service to provide any type of service that will benefit a portion of the municipality. For example:
- Sewer service
- Water service
- Sidewalks for a neighbourhood
- Downtown revitalization
- Recreation facilities to serve a part of a large municipality
Business Improvement Area
A business improvement area is a special type of local area service where the local service tax may only be levied against properties classified as business or light industrial properties within the designated area.
Approval to Establish Local Area Services
A local service must be established through bylaw with the approval of the municipal council. In addition, the bylaw must receive the approval of the property owners or electors within the proposed local service area. There are three methods that may be used by the municipality to obtain the approval of owners/electors:
- Petition: A successful petition must be signed by:
- at least 50 percent of the owners of properties
- representing at least 50 percent of the assessed value of land and improvements that will be subject to the local service tax
- Council initiative: An initiative of the municipal council would be successful, providing no more than the following petition against the proposed local service area within 30 days of a public notice of the initiative:
- less than 50 percent of the owners of properties
- representing less than 50 percent of the assessed value of land and improvements that will be subject to the local service tax
- Assent voting: Often known as a referenda; electors in the proposed local service area vote whether or not to provide the service.
Learn more about:
Borrowing for Local Area Service Capital Works
A municipality may borrow money for capital works required by a local area service through a loan authorization bylaw. If all of the costs of borrowing for a local area service are to be recovered by a local service tax, the loan bylaw does not require the approval of the broader municipality. However, the loan bylaw does require the approval of the owners/electors within the local service area through petition, council initiative, or assent voting.
If part of the cost of borrowing for the purposes of a local area service will be repaid by the broader municipality, that part of the borrowing must be approved on a municipal-wide basis (through assent voting or an alternative approval process).