A leading Ottawa real estate executive is calling on the city to give all commercial landlords facing financial hardship due to the COVID-19 pandemic a six-month break on property taxes.
In an open letter released Wednesday, CBRE Ottawa managing director Shawn Hamilton also urges the city to let property owners repay the tax shortfall over a period of five years starting in 2021 rather than having to shell out one lump-sum payment to cover the deferral.
“This reduces the most risk for the greatest number of stakeholders and will produce a quicker recovery for the local economy and city coffers,” Hamilton wrote.
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“Most importantly, it will allow landlords to ensure that these savings are passed on to the tenants.”
Hamilton says the city’s plan to allow owners of buildings under an assessed value of $7.5 million to defer paying their taxes until Oct. 30 doesn’t go far enough.
Although 91 per cent of all commercial buildings in Ottawa fall within that threshold, Hamilton argues owners of larger commercial complexes deserve a break as well.
“A tenant in a downtown tower has the same stresses as a tenant in a smaller neighbourhood plaza,” he writes. “To exclude one from relief because of the value of their building envelope is unfortunate. If we are helping business, we need to help all those who need it. Full stop.”
Hamilton says he’s worried that many landlords won’t be able to afford a single tax payment in October, arguing repayments need to be spread out over “a significant period” to allow property owners and their tenants time to recover from the current economic shock.
“Many businesses who survive the next few months will emerge in a weakened state,” he writes. “To incur a balloon of costs can and will tip business over the edge, just as they are emerging from the storm.”
Hamilton says that under the current plan, some landlords might be reluctant to pass savings from deferred taxes on to the tenants who need them because they fear those businesses won’t be around when the economy starts to pick up again.
“Deferring taxes to a later date when they may have fewer tenants paying rent creates a new problem on top of the loss of rent (landlords) are experiencing,” he writes.
