Assessment & Taxation

Why do I pay taxes?

The Town of Paradise has been incorporated under the Newfoundland Municipalities Act, 1999. The Municipalities Act prescribes the rules under which the Town operates and it gives the Town the ability to impose certain real property taxes upon residents of the Town. Taxation provides funds that the Town requires in order to operate. A Council will set its tax rates annually to cover the level of expenditure forecasted for a year.

Typical expenditures include such items as loan payments for water and sewer capital projects, expenses for street maintenance and snow removal, street lighting, fire protection, municipal enforcement, building inspection, garbage removal, wastewater treatment plant operation, community centres and green space maintenance, planning, development and administration.

What types of taxes does the Town charge?

The Town follows the rules of taxation as set out in the Municipalities Act. The Town taxes real property relating to personal and business residents. In addition, it has a set rate structure for permits and licences relating to development and maintenance activities in the Town.

How is my real property assessed?

Property tax assessment is the process by which a dollar value is assigned to property. Property applicable to assessment includes buildings and land or any other space occupied in the Town. Property assessments must be fairly and objectively performed to ensure that the tax burden is distributed fairly amongst residents of the Town. To achieve this objective, the Town utilizes the services of an independent organization, the Municipal Assessment Agency Inc. (MAA – www.maa.nf.ca).The MAA, operating under the Newfoundland Assessment Act, provides residential and commercial assessment services for all municipalities in Newfoundland with the exception of the City of St. John’s. The MAA establishes a fair market value for all properties as of a certain base date.

Through the MAA website, one can perform an on-line search for assessment values of all properties in the Town as this information is free and available to any member of the public. A printed version of the assessment roll is also available for viewing at the Town Hall. The MAA and the assessment roll provide information on assessed values only and not on amounts owing or paid by residents.

How is my tax bill calculated?

The Town applies certain mill rates to each assessed property value. The annual invoice for taxes is calculated as the total assessed value times the mill rate divided by 1,000.

Residential example:

If a resident’s house and land has been valued at $100,000, the Residential Property Tax due would be $890.00:

$100,000 assessed value X 8.9 mill rate/1000 = $890.00

Commercial example:

If a commercial building and land has been valued at $100,000, the Commercial Property Tax would be $1060.00:

$100,000 assessed value X 10.6 mill rate/1000 = $1060.00

If the business that occupies this property has been assessed in Class 4 (mill rates vary according to Class), the Business Tax due would be $1800.00:

$100,000 assessed value X 18.0 mill rate/1000 = $1,800.00

In addition to property charges, if your property can access the Town’s water and sewer services, a yearly water and sewer tax rate for each unit applies. A waste water treatment fee for each unit that is on the Town’s sewer services is added as well. All these components make up your yearly tax invoice.

When are taxes due?

Annual tax invoices are issued by January 15th each year and are due by February 28th of the same year. If payment in full has not been received by February 28th or post-dated cheques/preauthorized payments have not been received by this date (see below), interest will be added to your account after the due date February 28th on a monthly basis.

What happens if I buy or build property part way through the year?

Residents buying a house in Paradise will be charged taxes only from the date of transfer of the property as evidenced by the deed of sale provided by your lawyer. Taxes for the property in question have to be paid in full to the Town of Paradise prior to the sale. The pro-rated tax portions for that year are usually worked out between the lawyers for the purchasers and vendors.

Residents building a new house in the Town will first receive an invoice for the land only and then after moving into their dwelling during the year can expect an invoice for the house portion within a few months of occupancy of their dwelling.
How can I pay my taxes?

Payments are accepted in cash, interac, cheque, money order, post-dated cheques, preauthorized automatic debit and payment through mortgage companies. Cash and interac options are available only in person by paying at the Town Hall.

Cheques that are returned by the bank for non-sufficient funds (NSF) are subject to a $20.00 administration fee.

How can I pay with post-dated cheques?

The post-dated cheque payment method allows payments to be made equally over the year, without interest being applied. The Town will accept post-dated cheques to pay annual taxes and will not apply interest as long as the following conditions are met:

* Post dated cheques have to be in the Town’s possession by February 28;
* The total amount due is to be divided in equal amounts, for example by 11 months (February to December), to ensure equal payments throughout the year. The day of the month can be chosen at the resident’s discretion. Bi-weekly payments are possible as well. Quarterly payments can be accepted when the payment date is set for the beginning of each quarter, that is April 1, July 1 and October 1.
* The balance of the residents account must be $0 by the end of the billing year.

If all these requirements are fulfilled, there will be no interest applied to the resident’s account for that billing period.

Can I pay my taxes through my mortgage company?

The property tax can be paid through mortgage companies. The mortgage company has to contact us in writing to inform us that they handle the account on your behalf. A copy of the yearly tax invoice is then sent to the mortgage company for payment as well as to the resident for their convenience. Please note that with this payment method the resident has to ensure that current year taxes are covered as well as next year’s taxes.

What happens if I cannot pay my taxes as prescribed above?

If for any reason taxes cannot be paid for the year, please call the Town Hall and discuss with the Finance Department.

In cases of extreme hardship, taxes may be deferred for a period of time. In these circumstances, proof of hardship must be supplied to Council who may approve a deferral of taxes. Deferral of taxes means that the taxes are not written off but are kept on account with interest accumulating.

The Town sends monthly statements to residents with taxes owing. Accounts which are not paid by as prescribed are normally sent to a collection agency for collection. Once your account is listed with a collection agency, your credit rating may be adversely affected.

Under certain conditions, the Municipalities Act gives the Town the right to sell a resident’s property to recover unpaid taxes. This “tax sale” of property follows a prescribed process and can ultimately end with a public auction of a resident’s property in order to collect on taxes owing for a particular property.

How is interest applied to my account?

Interest is applied on a monthly basis at a rate of 1% per month, simple interest, on the principal amount owing only. To ensure that all residents are treated equally, there will be no write-off of interest charges on outstanding accounts.

Can I get a senior’s discount?

A 10% discount on the property portion only is given to the resident owning and residing at the property in question and is a minimum 60 years of age. This does not include reductions for business tax, water and sewer tax, vacant land tax or any other tax levy of the Town.

The senior’s discount will be given with the last payment for that account providing the account is paid off within the given billing year. If the post-dated payment method is chosen the resident can inquire as to the amount of the seniors discount and this amount can be worked into the cheque amounts, providing the post dated cheques are within the Town’s guidelines for post dated cheque payments. If legal or other collection action takes place against the account, the discount will be forfeited.

Can I get a business tax discount?

The Town wishes to promote new businesses in Paradise and offers a three- year 50% tax discount for new and non-competing businesses locating in the Town. This reduction of business taxes is applied to an account only after the business’s 50% portion of business tax is paid and must be paid within the billing year. If legal or other collection action takes place against the business, the discount will be forfeited.

In order to be considered for the business tax discount, a business must send a written request to the Finance Department at the Town Hall. The request must outline the type of business, provide reasons why it is a non-competing business and the start date of operations. This request will be brought forward to Town Council for their consideration and potential approval. The outcome will be confirmed in writing to the new business.