Improvement District Taxation
Improvement districts have authority to directly levy and collect property taxes to support the services they provide to properties within their boundaries. This revenue is used to finance operations of the improvement district, to build reserve funds for future infrastructure expenditures and repay debt from past infrastructure purchases.
Property Tax Calculation
Improvement district trustees have the authority to design a method of taxation that distributes service costs among property owners.
Taxes may be based on individual parcels, physical area, property frontage, and/or value of land and improvements. Taxable properties may also be further divided into different grades or classes of land and improvements. This classification process is usually based on property usage, for example, residential, business or industrial classifications. Tax rates may vary between classes and do not vary within a class.
The annual total tax revenue yielded from all tax sources and all properties should equal the total amount budgeted as tax revenue by the improvement district.
Property classes are established by bylaw. An assessor appointed by the improvement district board of trustees assigns each property to a class to create an assessment roll. When the initial assessment is complete, notices are sent out to each property owner who then has an opportunity to challenge the classification and/or assessment of their property. After the final roll is confirmed, it is in place until otherwise amended.
Property Tax Levy
The trustees may adopt a bylaw that levies parcel, area, frontage, and/or property value taxes on the various classes established in the assessment bylaw. The tax bylaw must state the the rate of taxation applicable to each class of property. The bylaw also establishes a due date for the taxes and a percentage to be added to unpaid taxes to be added after the due date.
A taxation bylaw requires approval by the Inspector of Municipalities to become effective. Tax notices containing this information are sent to each property owner.
Improvement districts that provide fire protection or street lighting service may tax properties directly or have the provincial government levy the tax on their behalf through the Office of the Surveyor of Taxes.
Taxes in Arrears
Interest begins to accrue on unpaid property taxes on the first day of March in the year following the tax due date. The rate of interest is set by the provincial government.
When these amounts are 24 months overdue, the improvement district must hold a tax sale at which the property is sold for at least a sufficient amount to recover all outstanding taxes and charges plus any costs related to holding the tax sale.