City council voted Monday to go ahead with a planned property tax hike for homeowners to help businesses weather the economic storm but will allow Calgarians to defer their property tax payments until Sept. 30, 2020.

Property tax bills will be sent out as usual in May and those who can pay, should, said Mayor Naheed Nenshi.

But there will be no penalties for those who wish to defer their payments until fall. Penalties will only be charged on any balances outstanding after Oct. 1.

"We just wanted to give people a bit of breathing time as we figure out what life looks like on the other side," Nenshi told media following Monday's meeting. "I'd love to be able to do more tax relief, we're not in a position to do that today."

Those enrolled in the Tax Instalment Payment Plan​ can call 311 to request their payments be halted, and can then re-enrol at a later date.

While taxes are technically frozen this year, council voted to finalize this year's 7.5 per cent tax hike for residential properties and 11 per cent cut for business properties to shift the city's tax burden. That represents an increase of about $20 a month for a median-priced home of $455,000.

If homeowners want to use the deferral, here’s how their monthly payments would look if they have a median priced house. <a href="https://twitter.com/hashtag/yyccc?src=hash&ref_src=twsrc%5Etfw">#yyccc</a> <a href="https://t.co/Ut6IXV3nM9">pic.twitter.com/Ut6IXV3nM9</a> —@CBCScott

Nenshi said it's important to remember that the hike for homeowners was necessary to prevent most business owners from facing sky-high bills.

"Remember that it's actually a shift of taxes. While residents are paying much more, businesses are paying less," Nenshi said, adding that it was important to make a decision quickly to take away immediate stress from those worrying about those upcoming bills.

The city had already implemented several measures to support Calgarians through the coronavirus pandemic, like utility payment deferrals and suspending disconnection for non-payment of electricity services until further notice. The province's portion of residential property tax rates is being frozen at last year's level.

City administration presented the expected impact of property tax deferrals to the city's cash flow — if all Calgarians defer, that's an estimated combined $877 million in delayed payments, but if 50 per cent of those enrolled in TIPP continue to make payments, the impact would be $244 million. Property taxes fund half of the city's operating budget.

City losing $15M a week, mayor says

The mayor said the city is facing enormous revenue losses and unlike other levels of government, it cannot run a deficit.

"We're losing $15 million a week, and we'll be very lucky to make that up by the end of the year. And we certainly will not find further savings," Nenshi said.

The meeting, which was held remotely, was council's second since the city declared a local state of emergency.

Only Mayor Nenshi and Coun. Jeromy Farkas were in the council chambers, and Farkas was reprimanded for his in-person presence by the mayor, who suggested it's council's role to demonstrate the importance of staying home and practising physical distancing. The councillor said he needed to be present due to earlier technical difficulties.

Later, council passed a motion stating that only the chair should be present for meetings held during the COVID-19 pandemic. Farkas was the lone vote against.

That moment wasn't the only time in the meeting Farkas and the majority of council butted heads.

The councillor suggested an amendment to freeze taxes and was quickly accused of political grandstanding at an inopportune time by the mayor and a number of other members of council.

"Coun. Farkas, seriously, we're in a crisis, could we maybe try working with each other?" Coun. Jyoti Gondek asked by phone during the meeting.