Tax Collection Policy

This policy provides guidelines to staff for effective and efficient collection of property taxes and to ensure that all taxpayers are treated fairly and equitably with respect to the collection of their property taxes.

Policy statement

The guidelines contained in this policy serve to supplement the provincial legislation that governs this area, especially for situations where a choice is provided allowing for Treasury's discretion, and for issues when the legislation is silent.

Scope

The scope of this document is intended to cover only the aspects of “collection” of property taxes and any amounts added as taxes for collection. The document will not incorporate “billing” policies as these are covered annually with the Interim Billing and Final Billing Collection By-Laws as well as under the Municipal Act, 2001.

Accountability

The Treasury and Deputy Treasurer are responsible to ensure that outstanding Property Tax collection processes are performed in accordance with this policy and all applicable legislation. In addition, the Treasurer, Deputy Treasurer or delegate is responsible to:

• Ensure this policy remains consistent with current legislation
• Ensure applicable staff are aware of and trained on this policy
• Communicate any policy revisions to applicable staff
• Assess overdue Property Tax accounts to ensure tax collection processes are performed in accordance with this policy

Definitions

Municipal Tax Sale – means the sale of land for Tax Arrears according to the proceedings prescribed under the Municipal Tax Sales Act and Ontario Regulation 181/03

Penalties and Interest – means amounts applied by the Municipality to unpaid Property Tax accounts, in accordance with Section 345 of the Municipal Act, 2001

Property Taxes – means the total amount of taxes for municipal, county and school board purposes levied on a property and includes other amounts added to the tax roll as may be permitted by applicable Provincial Legislation

Tax Arrears – means any portion of Property Taxes that remain unpaid after the date on which they are due

Penalty and Interest Charges

In accordance with Section 345 of the Municipal Act, 2001, interest at a rate of 1.25% is added to previous years' arrears and Penalty at a rate of 1.25% may be added to over-due current taxes on the day after the due date; and is added on the first day of each month thereafter.

Penalty and Interest charges are adjusted only in accordance with the following situations:

• Tax Adjustments made under section 357/358 of the Municipality Act, 2001
• Assessment Review Board Decisions
• Payments that have been received before month end but have not been processed through the tax system prior to penalty and interest being added
• Approved by the Treasurer or Deputy Treasurer as a gross or manifest clerical error

Payments

Payment of taxes must be received in the Municipality's administration office, on or before the due date. Payments not received on time are subject to Penalties and Interest. The following are the modes of payments available for the property owner's use:

• Telephone or Internet Banking – using the nineteen digit roll number as the account number (please note: property owners must allow at least 2-3 business days in order for the payment ot reach the Town of Shelburne's financial institution)
• Visa or Mastercard through Paymentus. This can be accessed online or by telephone. 
• One of the Municipality's Preauthorized Payment Plans (instalment based or monthly)
• Post dated cheque(s)
• In person – at the counter by cash, cheque, debit or money order
• In the secure drop box located at the Victoria Street staff entrance door and is also accessible after hours
• Payments by a mortgage holder
• Other alternatives as approved by the Treasury Department

Receipts will be provided for all cash payments and upon request by the registered owner for all other methods of payment. To registered owners whose payments are made on their behalf by a mortgage company, the receipted tax bill will be sent to the registered owner once payment has been received.

In accordance with the Municipal Act, 2001 Section 347 payments shall be applied as follows:

• First to the oldest and all Penalty and Interest Charges
• Then to the taxes starting with the oldest taxes up to the current taxes
• Then to other charges that have been added to the roll (if any)

Returned payments

Payments that are returned by the bank marked “insufficient funds or non-sufficient funds” will be subject to an NSF fee as set out in the Town of Shelburne's User Fees and Charges By-Law.

Tax arrears collection

Realty taxes are a secured special lien on land in priority to any other claim (except a claim by the Crown). Taxes may be recovered (with costs) as debt to the Municipality from the registered owner and/or any subsequent owner of the property.

The Municipality will primarily use the following methods to collect Tax Arrears:

• Verbal communications;
• Monthly Tax Arrears Statements;
• Annual Auditor Verification Letters;
• Sending a personalized reminder letter to those approaching one year in arrears;
• Sending a personalized reminder letter to those approaching two years in arrears;
• Arranging a satisfactory term of payment that significantly reduces the previous and current taxes;
• Legal action
• Municipal Tax Sale Proceedings

To remind property owners that their tax account is not in good standing the Treasury Department shall send a reminder notice to each property owner, whose account is over five dollars ($5.00) in arrears. This shall take place at the beginning of each month following the addition of the monthly Penalty and Interest charges.

At least once per year the Municipality shall review its Property Tax Aged Trial Balance for owners whose taxes are approaching one (1) and two (2) years in arrears. A personalized reminder letter will be sent to the affected properties providing them with their options and giving them the opportunity to bring their account into good standing. If the letter is a Final Notice, a deadline date will be given and no further notices will be sent after that date has passed.

Payment arrangements may be entered into by the Treasurer or the Deputy Treasurer, with a property owner who is in tax arrears, prior to the file being forwarded to the solicitors to commence proceedings under the Municipal Tax Sales Act. However, payment arrangements must include all tax arrears, current taxes, accruing estimates of future taxes as well as Penalties and Interest and be sufficient to ensure payment in full is realized within a reasonable period of time. Penalties and Interest will continue to accrue during all such payment arrangements until full payment on the account has been made.

If acceptable payment arrangements are negotiated, the account will be monitored for compliance. If there are two consecutive returned payments, or two payments are returned or missed/not made within six months, the payment arrangement will be deemed void and the taxpayer will be advised that payment in full, by certified cheque or money order, is required or the account will be sent to the lawyers to commence the Tax Sale Proceedings.

Municipal tax sale proceedings

If acceptable payment arrangements are not negotiated prior to the deadline date provided in the Final Notice, then all properties in excess of two (2) years in arrears shall be subject to the Municipal Tax Sale Process.

The Town of Shelburne's Municipal Solicitors will be engaged to carry out the Tax Sale Process as outlined in the Municipal Tax Sales Act.

If a Tax Arrears Certificate has been registered against a property under the Municipal Tax Sales Act, no partial payments can be accepted by the Municipality. All correspondence regarding the account will be directly with the Town's appointed Lawyers. Should an extension agreement be discussed at this point with the property owner and the Towns appointed lawyers, the extension agreement may be presented to the Towns Treasurer for review and approval. It is at the discretion of the Treasurer, or his/her designate as to whether the extension agreement is accepted on behalf of the municipality.

Payment of the Cancellation Price will include all and any fees incurred by the Municipality during the collection process.

Failure to provide payment in full within 280 days of the registration of the Tax Arrears Certificate will result in the property being advertised for public sale.

Miscellaneous

From time to time property tax accounts may experience credit balances for various reasons such as reduction in assessment, tax class change, duplicate payment, or payment in error. Credit balances may be refunded as long as the owner makes a request in writing and as long as all instalments billed have been cleared.

If an owner of a property fails to notify the Municipality of a change in mailing address, resulting in the return of their mail, no further action will be taken by the Municipality to locate the whereabouts of the owner.