Edmonton to tax derelict property owners

Edmonton has passed a new tax subclass that will tax derelict property owners, including properties abandoned during demolition or construction, as part of a larger effort to combat “problem properties and encourage community vibrancy.”

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Edmonton has passed a new tax subclass that will tax derelict property owners, including properties abandoned during demolition or construction as part of a larger effort to combat “problem properties and encourage community vibrancy.”

Starting next January, any properties in “mature residential areas” that are considered derelict as of Dec. 31 will receive a letter explaining the subclass and potential tax implications. Preliminary “visual inspections” of residential properties would have been completed and assessors will conduct a secondary inspection in December based on their physical condition.

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The city will begin communications throughout the fall to raise awareness of the new subclass to owners of derelict property and the public. The city said a letter is being sent this month to owners of properties identified as “potentially” derelict.

In fall of 2022, the City of Edmonton took a step in cracking down on derelict buildings and rundown homes, tasking city staff with drafting a new tax subclass for rundown homes and ways bylaws could change to target them.

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At Wednesday’s city council meeting, administration provided a slightly modified definition of the subclass from the version presented in March to include properties abandoned while in the process of construction or demolition. As of Aug. 31, 274 properties have been identified as derelict.

Under the subclass a “derelict residential” property is defined as a home that shows serious signs of neglect, is dilapidated, falling into significant disrepair or is uninhabitable. It includes properties that have been abandoned in the process of being constructed or demolished.

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The property will also fall into a proposed geographic area — the area known as the mature neighbourhoods overlay, but will include some modifications for consistency and to ensure the area can be “defined unambiguously to a legally defensible standard.”

subclass area
Derelict properties located in this geographical region (with some exceptions) within the City of Edmonton will be taxed under the new subclass in the new year. supplied Photo by City of Edmonton

In December 2022, Edmonton provided the problem properties initiative with permanent funding to implement its long-term strategy to address residential and commercial properties that cause “frequent and serious safety concerns” to the City of Edmonton. The initiative includes partners such as Alberta Health Services, the Government of Alberta and Edmonton Police Service and has been a primary driver for the new tax subclass for derelict properties. Not all problem properties will considered derelict and vice versa.

“Some community members expressed concern that increased taxes may be insufficient to address the issue, though these engagements focused on the broader problem properties issue and were not specific to derelict properties,” states a report from city administration.

The initiative addresses properties that have a history of recurring violations relating to public health, safety codes and other illegal or criminal offences.

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In a Wednesday news release, the city said the tax subclass is a new tool that will be used to address the negative impacts derelict properties can have, including increased costs for the city.

“Managing derelict properties often comes with additional costs to the city and a higher tax rate will help to cover those costs while encouraging property owners to clean up derelict houses. We hope this will play a role in improving the vibrancy of mature neighbourhoods in the long run,” said Cate Watt, branch manager, assessment and taxation.

According to the report by city staff, the 274 properties identified as potentially derelict were levied $699,151 in municipal taxes in 2023.

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