Kingston changing residential tax strategy

Kingston will no longer be charging interest on primary residential property taxes, as long as ratepayers sign up for a pre-authorized payment plan.

The village commission voted at a recent meeting to accept the proposal from clerk/treasurer Mike McCleave.

The village is hoping more people will take advantage of the agreement and sign-up for pre-authorized payments.

“The interest charged is supposed to be an incentive for those in arrears to quickly pay off their amount owning,” McCleave said. “If the property owner is making approved monthly payments, the village does not need to provide that interest incentive.”

McCleave said he thinks it’s easier for residents to budget a set monthly amount instead of trying to find a lump sum to pay twice a year. That’s the reason for having the monthly program, he said.

McCleave said the new policy, which takes effect this month, will not remove previously incurred interest charges.

As of Jan. 8, there were 72 properties on the monthly pre-authorized payment plan incurring a total interest of $40 per month. The interest rate is one per cent per month, compounded.

The new policy also doesn’t apply to rental properties or commercial accounts.

He said village residents not on the pre-authorized payment program currently have total arrears of $34,000 once “commercial properties and the delinquent abusers” are removed. McCleave said these arrears would incur an additional $340 per month in interest.

He said interest charges are not intended to punish people. If it were, he said, “we would have a much higher interest rate.”

He hopes the new policy will help reduce costs to financially strained residents; lower the number of possible tax sales; and cut administrative costs, as there would no longer be a need to estimate the monthly preauthorized payments or calculate the interest on those properties. It would also eliminate the need for administration to chase down delinquent property owners before homes reach the tax sale stage.

The village also offers a semi-annual pre-authorized payment plan that covers the full amount of taxes due on May 31 and September 30. The monthly plan is an approximation of the annual taxes divided by 12 months.