Interest Rates on Late Property Taxes Are Too High
As 2020 comes to a close, many Islanders are worried about upcoming property tax bills, says Liberal Finance Critic Heath MacDonald.
“As we all know, there are deep uncertainties about our provincial economy. Many businesses continue to struggle – and too many Islanders are either unemployed or under-employed,” MacDonald said.
“A spring decision to defer many property tax bills until December 31, 2020 will be of little comfort to people who will find it tough to get through the coming winter. And to get a tax bill right after Christmas will be pretty rough for a lot of Islanders.
“In particular, I am concerned with the rate of interest that may have to be paid on late bills some time in 2021. Right now, the Minister of Finance can charge 1.5 per cent interest on late bills per month – which works out to 18 per cent annually. Given the fact that the government can now borrow money at either two per cent or less, that rate seems highly punitive.”
As an additional relief measure, MacDonald says the government should consider dropping the interest rate on late property tax payments for the 2021 tax year.
“We know that Prince Edward Island is lagging behind the rest of Atlantic Canada in terms of employment recovery, and this has placed added pressure on individuals and families. With a bleak winter ahead, government should do what it can to ease the situation. The interests rate currently paid on government debt are at historic lows. In my opinion, this should be passed on to hard-working homeowners, families and renters.”