INNISFAIL – With Alberta facing a housing affordability crisis, an Innisfail apartment building that supports affordable housing clients will be exempt from provincial and municipal taxes in 2025 stemming from last year’s provincial government creation of an Affordable Housing Ministerial Order.
The issue was first brought to the Town of Innisfail council’s attention earlier this year when Erica Vickers, director of corporate services, noted the province introduced the Municipal Affairs Statutes Amendment Act in 2024 to amend the Municipal Government Act to include property tax exemptions for affordable housing accommodations.
“Alberta, like much of Canada, is facing a housing affordability crisis, with rising costs making it increasingly difficult for low-income individuals and families to secure stable housing,” said Vickers in her report to council.
“By removing municipal property taxes on eligible affordable housing properties, the government aims to lower operating costs for housing providers, allowing them to maintain and expand affordable housing options.”
Council was told that beginning Jan. 1 of this year properties designated as affordable housing accommodations will automatically be exempt from municipal property taxation.
But municipal councils will have the authority to pass a bylaw to make these properties subject to municipal property taxes, said Vickers.
However, even if a bylaw is brought forward the properties will remain exempt from provincial requisitions, such as the provincial education tax.
The new legislation will not impact other properties already exempt, including seniors’ lodges and accommodations owned by the Alberta Social Housing Corporation (ASHC).
Vickers noted affordable housing owned by ASHC has been automatically exempt from municipal taxation since 2017, with an expansion in 2022 that extended the exemption to properties purchased from ASHC by affordable housing providers.
“However, this left a gap for other non-ASHC owned affordable housing projects, which remained taxable despite serving the same purpose,” Vickers told council. “To ensure fairness around exemptions, new 2024 legislation now grants automatic property tax exemptions to all qualifying affordable housing accommodations, regardless of ownership history, while still allowing municipalities to pass a bylaw to continue taxation if they choose.”
Vickers noted the new provincial initiative was specifically important for a 33-unit apartment building on the south side of Innisfail that was offering affordable housing but was not exempt from paying municipal taxes.
For the 2025 municipal taxation year the subject Innisfail building was facing a $8,890.64 property tax bill but exempt from the provincial education tax portion.
Following her presentation, the issue was tabled for Vickers to bring back more information on the rationale behind the provincial government's decision and the potential impact on renters.
Vickers presented an updated report with the requested information, which satisfied all members of council.
She told council members the property tax exemption for affordable housing accommodations is aimed to primarily benefit housing providers, such as non-profit organizations and housing management bodies, rather than individual homeowners or renters.
“While housing providers will no longer have to pay municipal property taxes, there is no legal requirement for them to pass these savings directly to tenants by reducing rent,” said Vickers through her report to council on March 24.
“However, some housing providers may use the tax savings to stabilize or slow rent increases, especially in the face of rising costs for maintenance, insurance, and utilities.”
A motion was then presented to council on how best to move forward.
Council had three options, with the first to pass a bylaw to make all affordable housing accommodations taxable.
The second option was to pass a bylaw to make all affordable housing accommodation taxable at a rate council deemed appropriate, such as 100 per cent, or 90 or 80, etcetera.
The third and final option was not to take action with the subject property and any future properties that meet the requirement of becoming exempt starting with the 2025 taxation year.
Council unanimously approved a motion to direct administration to take no action and allow the property tax exemptions for affordable housing to take place for the 2025 taxation year.
