As pandemic restrictions ease, the City of Orillia is set to resume collecting outstanding property tax debts, beginning with those that had defaulted prior to the pandemic.
After relaxing its collection efforts through 2020 and 2021, the city will begin pursuing $1.5 million in defaulted taxes, spread across 155 properties that are now eligible for tax sales, in April.
Though the city is owed a total of $6.2 million in tax arrears according to its 2021 data, the $1.5 million it will be pursuing comes from properties that are three years behind on payment.
These properties may now be subject to the tax eligible sales process, which allows the city to sell a property to recover tax revenue.
“Tax sales are a last resort for the city in the collection process of tax arrears,” said chief financial officer/city treasurer John Henry. “The city works with property owners to prevent a tax sale from going to this stage and, in most cases, balances are received.”
Proceeds from the sale of a property are used to cover tax arrears, with any excess transferred to provincial courts, which determine the allocation of the remaining funds, Henry said.
He said that the city has undertaken numerous actions to ease the burden of tax arrears on property owners throughout the pandemic, including the following:
- Waiving tax arrears penalties and interest for both residential and businesses until August 2020
- Approving a zero per cent tax rate increase for the 2021 budget
- Relaxing its collection efforts through 2020 and 2021
- Waiting three years to pursue tax sales, as opposed to the legislated two-year requirement
- Establishing the economic recovery task force, which implemented support programs such as the See You on the Patio program
Sale eligible, defaulted tax figures jumped from $645,000 to nearly $1.4 million, according to the city’s 2019 and 2020 data, but Henry told OrilliaMatters that “all 155 properties (the city will be seeking payment from) would have been in payment default prior to the pandemic starting in 2020.”
He said the city will not currently be pursuing tax sales for properties that began defaulting in the pandemic.
“Properties defaulting for the first time in 2020 or after would not be included in the reported 155 properties,” he said. “They would potentially be eligible for tax sale registration in 2023 and the earliest a tax sale could occur is 2024.”
Henry also noted that most of Orillia’s property owners are up to date with their property taxes, and that the city is in communication and working with most of those who are behind on taxes.
