Property tax late penalties likely to rise slightly in 2020
By Medicine Hat News on November 27, 2019.
The penalty for not paying property taxes on time will likely edge up slightly in 2020, a city committee heard Tuesday. The yearly adjustment on late penalties and prepayment discounts show that the rates should rise to 7 per cent and 1 per cent, respectively, owing to generally higher Bank of Canada interest rates that form the basis of the city policy. Those without a fixed payment plan who miss the June 30 tax payment deadline are currently charged 6.83 per cent annually, and those who prepay in block amounts earn 0.83 per cent annually on their balance. The new rate would see 4.05 per cent immediately on amounts owing, then about 0.59 per cent charged each month for a total of 7 per cent per year. Administrators say that $284,400 was deposited in prepayments in the past year, while $407,800 was collected in late charges. A change several years ago deleted the ability to charge interest on only the principal amount, not late fees. The city’s tax penalty and discount policies states rates should be set at the Bank of Canada rate plus 2 per cent in the case of penalties and minus 1 per cent as a discount (to a minimum of 0.5 per cent). The measure will be voted on at council’s Dec. 2 meeting. 9-8
