Alix village council decided it will seek title to a property in tax arrears after said property didn’t move at a public auction. The decision was made at the July 3 regular meeting of council.
Assistant Chief Administrative Officer (CAO) Tanya Meston presented councillors with the results of a tax recovery auction held for properties with unpaid tax bills and which had gone through the appropriate Municipal Government Act (MGA) process for such situations.
Meston noted in her memo the unsold property, described as Lot 1, 2 Block K Plan 5676AE, was offered for public auction June 25 but not a single offer was made on it.
Councillors now faced three options: take tax forfeiture title of the parcel with the intent to sell it; take clear title of the parcel with the intent to use it for municipal purposes; or leave it as-is.
Meston noted that choosing option #3 also allows the unpaid property tax bill to increase with few options for resolving the situation.
The Assistant CAO provided a report from TaXervice, a company that specializes in handling tax recovery auctions for municipalities.
The report initially stated that the Village of Alix had two properties up for tax recovery auction on June 25, and one of them sold: Lot 24, Block 3, Plan RN30 that had a reserve bid of $13,900. Reserve bids in tax recovery auctions tend to hover around the assessed value of the land.
However, TaXervice noted the second parcel, with a reserve bid of $96,700, didn’t get any offers; TaXervice noted that as the property didn’t sell at auction, the village could take title itself.
TaXervice noted that taking tax forfeiture title of the parcel would allow the village to sell it to recover unpaid taxes.
Readers should note that in such situations the municipality may only keep the unpaid tax bill and costs related to the tax sale itself; any revenue from the sale over and above that must be returned to the original owner.
During discussion Meston reminded councillors the parcel in question is zoned residential and the village hasn’t been required to do any work to the parcel; hence, it hasn’t cost the taxpayers anything substantial to this point.
Coun. Tim Besuijen asked if the village can accept offers for less than market value as the parcel didn’t sell at auction.
Meston responded yes, offers less than market value could be accepted if the offer is approved by council.
Besuijen wanted to clarify that all the village’s expenses for the auction and tax forfeiture title are covered by the original property owner not Alix’ taxpayers. “…because we’re doing all the work to sell this property for this person,” added Besuijen. Meston answered yes, all the village’s expenses are taken out of the sale revenue so essentially the previous owner bears those costs.
Meston said she also wanted to clarify that if the village takes ownership of the parcel in question, property taxes stop accruing.
She also pointed out the property owner can stop the forfeiture process at any point by paying their property tax bill before the property actually changes hands. The unpaid tax bill is $9,856.65.
Councillors unanimously approved the Village of Alix seeking tax forfeiture title to the property in question with the intention of selling it.
Stu Salkeld
Local Journalism Initiative reporter
ECA Review
