Administration is advising Chatham-Kent Council to delay implementing a by-law that would provide a lower property tax rate for affordable rental properties.
The Province of Ontario is now allowing participating municipalities to create a new property tax subclass that offers discounts for affordable rental housing units.
In a report to council, Chatham-Kent’s Director of Financial Services, Matt Torrance, recommends holding off on adopting the Affordable Rental Housing subclass for multi-residential properties in the 2026 tax year.
The new subclass would offer a property tax reduction of up to 35 percent for qualifying multi-residential properties with affordable rent. To qualify, a property or unit must be part of the municipality’s formally recognized affordable housing stock.
The deadline for municipalities to implement the subclass is September 30.
Torrance notes that the Municipal Property Assessment Corporation (MPAC) has not provided clear direction on how to identify eligible properties. He also warned that “the [CK] tax department does not have the capacity to manage a program of this magnitude with existing resources. The province has not provided sufficient time to do proper due diligence for implementation in 2026.”
Key concerns raised in the report include:
- Shifting the tax burden: The gross discount applied under this subclass is simply shifted onto other property tax classes.
- Outdated assessments: Property values haven’t been updated since 2016. Adding a new subclass without reassessment could create inconsistencies.
- Administrative challenges: There’s no clear process for determining which units qualify.
- Loss of flexibility: Once a municipality adopts the subclass, the province may require it to remain in place, reducing local control over future tax policy.
