As a result of winning an appeal against paying property taxes for a student residence, Queen’s University will be getting a $1.2 million rebate from the city of Kingston, Ont.
Since 2001, the university has paid about $416,000 a year in municipal taxes for its An Clachan property, a series of 19 buildings containing a total of 260 one, two and three-bedroom apartments.
The apartment was initially classified as a multi-residential building that was subject to annual municipal taxes.
However, the university filed an appeal with the Municipal Property Assessment Corporation (MPAC) based on the argument that it is a student residence for “educational uses” and should enjoy the same tax-exempt status as most other buildings at the university.
Investor Gillian Irving, who owns student housing properties in Hamilton and St. Catharines, believes the ruling is unfair for landlords like herself.
“Is it fair that Queen’s University doesn’t have to pay property taxes because they’re delivering a service that students need? No,” she said.
“Private investors also deliver on a service that students need, so I don’t know why Queen’s should get the benefit of not having to pay property taxes.”
Though she said she isn’t aware of similar tax breaks in the areas where she invests, Irving added that supply and demand usually take care of students’ housing needs.
“The schools can’t take care of all student housing needs, so they take care of a portion of it and private enterprise takes care of the rest,” she said.
“[Private investors] also gives students choice as to where they want to live, whether it’s on campus or near campus, with friends.”
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It’s a decision that may hurt landlords in a key student rental market by lowering costs for their major competitor.