Write-Off of Local Government Financial Assets
When taxes, rents, or lease payments are no longer collectible, a municipal council or regional district board may have further powers over the management and disposal of assets, including the authority to write-off outstanding amounts owed to local government.
There are a number of reasons why taxes, rents or lease become uncollectible such as:
- Property that has been destroyed
- Mobile homes that have been moved
- Renter/lesser has declared bankruptcy
When local government financial assets are deemed to be uncollectible, the council or board may, by resolution, request a Minister's order to write-off the outstanding taxes, rent, or lease payments plus any applicable penalties and interest.
Provincial Approval (Minister's Order)
Local governments requesting a Minister's Order to write off financial assets must submit the following information to the Minister responsible for local government for approval:
- A resolution of Council, directing staff to request the order
- The report to Council from staff that informed the resolution. This should give background on how the account has been proven uncollectible and what prior steps to collect the municipality has taken.
- The folio and property identification numbers of the property
- The total amount of all taxes, rents or lease payments, and applicable penalties and interest receivable from the folio
Municipal Tax Write-Off Policy
When considering a write-off of property taxes, it is beneficial that the municipal council be prepared and able to provide the same consideration to every taxpayer in the same situation.
Policy preparation may include developing a written policy on the circumstances in which it will request a write-off of property taxes. Council must adopt a resolution directing staff to request a write-off which must be included with the information submitted in the request to the Ministry responsible for local government.
Regional districts do not have the ability to write-off property taxes because municipalities, or the Surveyor of Taxes in rural areas, levies and collects taxes from properties on behalf of the regional district.
Property Tax Penalties
Penalties on municipal property taxes are only written off when avoiding the penalty is impossible and the write-off can be fairly applied to all in the same situation. Circumstances such as sickness, travel, bank error and mail strike are not adequate for the write off to be permitted. In each of these cases, another person or method could have been used to ensure that property taxes were paid on time.