Do third party tenants in Crown properties have to pay realty taxes on the space they occupy?
A. Under the Constitution Act, federal property is always exempt from taxation. However, if occupied by a third party, the property is not eligible for a payment in lieu of taxes unless the period of the tenancy is for less than one year or if it was a lease that existed when the property was acquired by the federal government. Under prevailing assessment legislation, assessors are generally required to assess tenant-occupied Crown property as if it were owned by the tenant. Furthermore, the legislation governing realty taxing authorities gives them the right to tax the tenant’s interest and the billing and collecting of the tenant’s taxes must be a direct interaction between the taxing authority and the tenant.
