Property tax expert Giselle Kakamousias of Turner Drake & Partners says paying attention to taxes could make a big difference in the bottom line of Halifax businesses.
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Downtown Halifax as seen from the Dartmouth waterfront.
[HALIFAX, NS] - A property tax expert says paying attention to taxes could make a big difference in the bottom line of Halifax businesses.
“Take a closer look,” said Giselle Kakamousias. “Property taxes are based on an opinion … and it’s always open to interpretation.”
The property tax veteran of 20 years is a division vice president at the real estate consulting firm Turner Drake & Partners, which hosted an information session for Halifax business owners on Thursday.
“Property taxes are one part of a suite of costs that a business owner faces,” she said. “So when they start to rise it becomes less affordable to run a business.”
Two factors affect how much tax property owners pay: the property value and the tax rate.
Property values are assessed by the Property Valuation Services Corporation — a provincially-mandated organization — while tax rates are set by city, and vary for residential, commercial and mixed-use properties.
According to Kakamousias, property values are subject to sudden hikes depending on a variety of influences, including recent sales in the neighbouring area.
“If you got your water bill and all of a sudden it spiked 20 per cent you’d ask questions,” said Kakamousias. “Same goes for your assessment.”
This year, the property value for iconic Halifax gift shop Jennifer’s of Nova Scotia rose by 16 per cent, despite a downturn in pedestrian traffic and overall business.
“Things have definitely taken a turn for the worst over the last two years,” said owner Kurt Bulger, who attended Thursday’s session to better understand the tax issues facing Spring Garden Road.
“A lot of business owners have their nose to the grindstone on a day-to-day basis making sure they keep their business up and running,” he said.
“(But) pay attention,” said Bulger. “It’s the insidious creep of small issues (like property taxes) that will drive a business under.”
Business community calls on HRM to rethink taxes
Members of Halifax’s business community are pushing the city to rework its tax system in the wake of a series of shop closures in the city’s downtown.
“If we really want to see healthy main streets the city should really step up and make some changes,” said Paul MacKinnon, head of the Downtown Halifax Business Association. “They recognize that it is an issue, but they haven’t really given clear direction to staff about what they want to accomplish.”
Recent closures in Halifax include the Just Us! on Barrington Street and the Spring Garden Road shoe store fixture, Winsbys, which is slated to close in late February.
“The lease rates and the tax rates downtown on Spring Garden Road is really driving a lot of the small independent businesses off of the side streets, or even out of business,” said Kurt Bulger, owner of Jennifer’s of Nova Scotia. “Nobody at the city seems to have any care or any worry about that.”
MacKinnon said he would like Halifax to set a cap on the difference between the residential and commercial tax rate. The city’s commercial rate is currently more three times that paid by residential property owners.
He also suggested Halifax create a lower tax rate for the urban core.