Yellowknife moves closer to implementing vacant land tax

The City of Yellowknife is in the final stages of approving new rules that change the way some vacant lots are taxed.

With land for housing in short supply, City Hall has spent more than a year examining possible solutions to spur development of vacant property.

A draft bylaw examined by councillors this week would create a new tax class for vacant land. Staff estimate 117 properties would fall under that class.

Overall, a briefing note for council states, the new tax class would bring in an extra $153,000 – a small sum in the grand scheme. But City Hall says the point is to nudge property owners to do something with their land rather than simply bring in money.

The tax change would work alongside a separate bylaw, introduced earlier this year, that similarly uses a system of increasing permit costs to incentivize people to develop empty lots.

Not all vacant land would come under the new tax class. Parking lots – more than 40 of them – were excluded in the draft presented to council on Wednesday, as were “undevelopable” contaminated lots and parcels of land where development is “progressing.”

The tax ratio proposed for vacant lots – 2.50 – means vacant land would be taxed at two and a half times the residential rate on each dollar of assessed value. (Commercial lots already have a tax ratio of 2, so the jump between an occupied and unoccupied commercial lot isn’t as high.)

A vacant lot would not necessarily pay more money than a developed lot as the ratio applies to assessed value. An empty lot is assessed far lower than a built-up lot, so owners of vacant land would pay a higher rate on a lower number under this proposal.

City planning director Charlsey White said the proposed 2.50 tax ratio is “significantly higher” than the number used by other municipalities studied by staff. It “really puts us at the leading edge of using this sort of tool,” she said.

Kavi Pandoo, the city’s director of corporate services, said the bylaw had been drafted with a view to avoiding “unintended consequences.”

“I think there will be lessons learned both through implementation and the appeals process,” Pandoo said, “and real-world experience will help identify areas where the definition may need refinement.”

Mayor Ben Hendriksen said the vacant land tax was “a big deal” for council and the community.

Hendriksen asked if the city could speed up the introduction of the tax, which currently isn’t due to kick in until January 2028. (The other bylaw, which deals with permits, takes effect in January 2027.)

White told him the city – which has four openings in its planning office alone – doesn’t have the resources to get all the behind-the-scenes work done in time to launch the tax in 2027.

“It’s just not feasible,” she said.

City getting big land requests

Also on Wednesday, White told council the city has seen an uptick in cold calls from people looking to acquire large chunks of land.

She’s asking for a new process to be implemented where big “unsolicited land requests” go to council for scrutiny before city staff start work on them.

“The city of Yellowknife is becoming very popular, not just in our neck of the woods but across the country,” she said.

“We have seen an increase in the number of requests for land – not just land that we have marketed for sale, but random large parcels of land that happen to be under city ownership.

“We want to have a second set of eyes on it because some of these properties are of community value or city value.”

Council was broadly supportive of that plan. “I don’t want to say no if we have land and someone wants to build stuff,” said deputy mayor Rob Warburton.

White said a couple of presentations could be coming to council soon, under the new process, from people looking to acquire large tracts of land. No further detail was immediately provided.