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Money How high is too high? Vancouver's property tax dilemma

22:50  01 december  2019
22:50  01 december  2019 Source:   cbc.ca

Five examples of Metro Vancouver homeowners losing big in a falling market

  Five examples of Metro Vancouver homeowners losing big in a falling market Five examples of Metro Vancouver homeowners losing big in a falling marketNaturally, this has become Twitter fodder, so here’s a look at some of the big recent losses as highlighted by Twitter handles Mortimer and Vancouver Real Estate Flip Flops .

Vancouver ' s property tax dilemma . If the City of Vancouver ' s proposed 2020 budget is approved, homeowners can expect an 8.2 per cent for property tax hike — 9.3 per cent when factoring next year's increase in utility fees.

The amount of property tax that you pay depends on its assessed value. If that assessment overestimates the value of your home, you are paying too much in If your property tax is realistically too high because of an error or a bad/incomplete assessment, it' s good to correct that — but don't try

  How high is too high? Vancouver's property tax dilemma © Mehaniq\Getty Editor’s note: The opinions in this article are the author’s, as published by our content partner, and do not necessarily represent the views of MSN or Microsoft.

If the City of Vancouver's proposed 2020 budget is approved, homeowners can expect an 8.2 per cent property tax hike — 9.3 per cent when factoring next year's increase in utility fees.

It is a hefty increase considering the average Vancouver property tax increase over the past five years was only 3.46 per cent.

However, it is being justified by the City of Vancouver as a necessity in order to fund initiatives to address the housing crisis, protect our environment and deliver quality core services.

Vancouver empty homes tax nets another $39M as number of vacant properties drop, city says

  Vancouver empty homes tax nets another $39M as number of vacant properties drop, city says According to the report released Wednesday, $39.4 million in revenue was raised during the 2018 tax year, which was collected from the owners of 1,989 vacant properties. That's a 22 per cent drop from the number of vacant properties taxed in 2017, when 2,538 homes generated $38 million in revenue.The revenue collected by the empty homes tax goes towards affordable housing projects and programs in Vancouver, including the creation of new housing and enhanced protections for renters.

Get information about property tax in Vancouver : how to pay your property tax and claim your home owner grant. • Property taxes help fund: Many of our essential services like police, fire fighting, and emergency rescue. Recreation and community centres, libraries, parks, and much more.

While Vancouver ' s overall budget has gone up by about 118 per cent this century, the budget for police services has gone up by approximately 140 per cent — from 5 million in 2001 to a proposed 4 million next year. How high is too high ? Vancouver ' s property tax dilemma .

Also, several economists have defended the increase as Vancouver's "mill rate" or the tax owing per $1,000 in property value, is lower than most other municipalities in B.C.

My take on the 9.3 per cent increase is a little different. Comparing Vancouver's "mill" rate to other municipalities across B.C. or Canada, while interesting, doesn't make me feel any better about paying the 9.3 per cent tax hike.

I consider the many variables which affect a city's budget.

In Vancouver's case, factors such as density, property values, and snow-removal will be very different from a city's like Terrace, or even Surrey or West Vancouver. Therefore, comparing mill rates is like comparing apples to oranges.

The effect on renters

It will be interesting to see how the tax hike will affect renters. Those currently renting won't be affected too much as B.C. limits rent increases to the cost of inflation.

City of Vancouver considering biggest property tax increase in over a decade

  City of Vancouver considering biggest property tax increase in over a decade If council passes the city budget as proposed, it would mean an estimated increase of $354 for the City of Vancouver's portion of the property tax bill on the median single-family home, from $3,809 to $4,163. Council is expected to vote on the budget by the end of the year and may propose amendments to reduce the tax increase — as they did last year — when a proposed 4.9 per cent increase was eventually reduced to 4.5 per cent.A special meeting is scheduled on Dec. 3 for members of the public to speak to council about the budget.Why the big increase?Overall, Vancouver's operating budget is proposed to increase by 7.

Vancouver council is considering a 4.9 per cent property tax increase for 2019, the largest in a decade. You can have lots of thoughts about what the taxation solution is or whether Vancouver politicians are spending too much time blaming others and not enough time finding efficiencies.

Learn how to read your main and advance tax notices, and find out about tax rates, land assessment averaging, and more. The total outstanding taxes on your main tax notice are the remainder of the property taxes you need to pay us this year.

Also, the city is planning on using some of the revenue generated by the tax increase to fund new affordable housing, tenant relocation and tenant protective policies.

The news isn't as good for landlords or new renters. Landlords add up all their costs such as financing, property taxes, strata, utilities and maintenance. Then, if the market allows it, set their rents hoping to cover their expenses. Therefore, a large increase in property tax ultimately be will be passed down to the renter in the form of higher rent.

Currently, many landlords are factoring in a bigger buffer into their cost analysis. The provincial government restricts rent increases to the rate of inflation, which for 2020 is 2.6 per cent.

This limitation is problematic for landlords as many of their expenses are increasing by five to 10 per cent. I'd anticipate that some are planning to increase their rents to new renters or economize elsewhere by spending less on maintenance.

Taxpayers will have more time to object to changes in property value

  Taxpayers will have more time to object to changes in property value The province is taking steps to end the mad scramble every March for New Brunswick landowners upset with their property tax bills to ask for and receive a review. But the changes won't come immediately.Service New Brunswick Minister Sherry Wilson announced Thursday that beginning next October, homeowners and other property owners will get detailed assessment notices in the mail, five months before a separate tax bill arrives in March.

Property taxes in Vancouver could go up as much as 10 per cent in order to cover a flurry of recent Those numbers, which staff say are high level estimates, would require a tax increase of at least six to seven Rebecca Bligh said Wednesday the outlook suggests council may be sending staff too many

Homes that are deemed empty will be subject to the Empty Homes Tax (Vacancy Tax ) of 1% of the Each year, every residential property in Vancouver is required to complete a property status declaration to Find out how the tax is enforced, about the audit process, how to submit a Notice of

As this is a draft budget, there is time for the City of Vancouver to make changes and lower the property tax hike, perhaps somewhere in the seven per cent range.

Psychologically, seeing a tax drop from 9.3 per cent down to seven per cent is a lot more palatable than experiencing an increase from 4.5 per cent (the 2019 rate increase) to seven per cent.

This is a common tactic used in sales and negotiations which, in the field of behaviour finance is referred to as "anchoring bias."

'Worrying' inflationary trend

Just five years ago, Vancouver's property tax increases were roughly in line with the rate of inflation, around two per cent. But in 2017, they jumped to four per cent, and are now proposed to be 8.2 per cent for 2020.

This is a worrying inflationary trend as it far exceeds most homeowners' salaries or landlords' profit margins.

When I reviewed the 600-plus-page draft Vancouver budget, it read like a highlight reel of the city's dreams and initiatives. However, critically, it lacked a cost/benefit breakdown for each initiative.

I understand that it is expensive to run a city and that Vancouver is "only" asking for an additional $354 from the owner of median single-family home.

However, between this and all the other increases in fees, such as Hydro and ICBC increases, homeowners are tapped out.

Rather than relying on homeowners as a captive and endless source of revenues, the city should instead focus on cutting costs, adjusting its goals and finding new sources of revenue.

I'm not against property tax increases. I know they are necessary.

But let's makes it easier for homeowners with smaller, more gradual increases as they too have a budget that needs to be balanced.

Chris Selley: John Tory's property tax hike is necessary, overdue, and thoroughly disreputable .
On Tuesday, Toronto Mayor John Tory takes the biggest swing of his term in office. City councillors will be asked to approve a one per cent property tax levy in 2020 and 2021, in addition to an existing 0.5 per cent previously approved, and a new 1.5 per cent levy from 2022 to 2025. That’s in addition to regular annual property tax hikes, which under Tory have been kept at or below the rate of inflation — that being a central promise of both his successful election campaigns. The extra money, projected to be $6.6 billion, goes into the so-called City Building Fund, a ring-fenced account created in 2015 to fund transit, housing and other critical infrastructure needs.

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