Interest Free PAD approved at Council
Monday, April 19, 2021 - 10:45 AM
Effective immediately, the City of St. John’s is implementing a program that could save you interest on your property tax payment.
If you are signed up for the City’s preauthorized payment program and pay your taxes monthly but not in advance you will no longer be charged interest on your payment.
The Personally Approved Debits (PAD) plan allows you to make monthly payments on your taxes with automatic bank withdrawals from your account. If you aren’t signed up for this plan, now is an excellent time to start. Visit our page to find out more about the program or to get an application.
I’m already signed up for the PAD program. Does this affect me?
Yes. Before today, the City currently had two kinds of PAD options:
- Paying in Advance - Using this option, no interest was generated on the tax account. Taxpayers had a credit balance with the City so that when taxes were due there were sufficient funds to pay them. Bills were paid in full at the end of February and August of each year as required by City policy on payment of taxes.
- Regular Payment - This option spread the payment of your tax bills over the year. Interest of 1.25% was charged on the declining balance owing at the end of each month. Bills were paid in full at the end of the year.
If you currently pay in advance, then you have a tax account that carries a credit balance. This month, City staff will stop payment for April to June and recalculate the payment for July to December, 2021 based on the amount we have on credit for you. By July, your regular payments will be back to normal, adjusted for the rest of the year so only the amount owing is paid.
If you were making regular monthly payments through PAD, as of April you will no longer be charged interest. Your monthly payment beginning April 2021 will be adjusted to reflect this change.
Due to the volume of manual adjustments required the City may not have all accounts completed before April payments are withdrawn.
I pay my taxes through my mortgage. Does this affect me?
If your mortgage includes your property taxes then your mortgage company is submitting payments twice a year on your behalf. You are not charged interest by the City. Check with your mortgage company to see if you can switch to Personally Approved Debits.
I pay my bill myself, with a cheque or at my bank. Does this affect me?
You can continue to pay your bill in person, at your bank, with cash or by cheque or post-dated cheques – the City offers a number of options for tax payment. However, if your payment is late, interest will continue to be charged. An administrative fee is also charged when a payment is returned as NSF (non-sufficient funds).
The personally approved debit program is an automated process which makes it easier on you – no more standing in line, writing cheques or worrying about due dates. It is also easier for the City. Staff can easily verify if payments are being honored. Manual transactions, such as post-dated cheques, require extra staffing resources or overtime. This new program not only helps residents reduce expenses, it also helps the City avoid increasing expenditures.
What about if I currently owe the City back taxes?
This program is for current bills only. Any taxes owing will still be charged interest.
Why doesn’t this program apply to commercial property owners?
Commercial owners are billed in advance but have 4 months to pay. For example, the January to March bill is not due until April 30. In addition, the filing of vacancy allowance claims makes use of a standard monthly payment more difficult to process and manage.
Questions? Concerns? Please reach out to our staff at 576-8251 or email taxation@stjohns.ca