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PROPERTY TAX 101

PROPERTY TAX 101. Vancouver Fair Tax Coalition. Non-partisan group Represents 27 organizations (43,000 Vancouver businesses) on property tax issues Seeking fair municipal property taxes for businesses and jobs.

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PROPERTY TAX 101

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  1. PROPERTY TAX 101

  2. Vancouver Fair Tax Coalition • Non-partisan group • Represents 27 organizations (43,000 Vancouver businesses) on property tax issues • Seeking fair municipal property taxes for businesses and jobs.

  3. Vancouver is known as a great place to live. We also want it to be known as a great place to do business.

  4. Our Purpose • Encourage livability in our City • Ensure jobs for our residents • Protect the sustainability of our City and neighbourhoods • Preserve the diversity and unique character of our City • Ensure that business thrives

  5. PART 1 Assessment Valuation

  6. Assessment 101 – Roll Creation British Columbia employs an “Ad Valorem” system, meaning “based on value”. The roll is created by BC Assessment which produces independent, uniform and efficient property assessments on an annual basis for all property owners in the province. • July 1 – Valuation • October 31 – Physical Condition (classification) • November 30 – Legal Title • December 31 – Assessment Roll and Notices • March 31 – Roll Authentication

  7. Assessment 101 • Value: • Market Value at Highest and Best Use • Approaches to Value: Income, MCA & Cost • Value is separated into two components. Land & Improvements • Value and Class are separate and distinct from one another • Value does not reflect current use in many instances • Classification is based on the actual use of the property

  8. Prescribed Classes of Properties Classification 2011 Value % of Roll % of # • Class 01 – Residential ($153 billion) 83.4% 91.8% • Class 02 – Utility ($179 million) 0.1% 0.1% • Class 03 – Supportive Housing ($0) 0.0% 0.0% • Class 04 – Heavy Industry ($195 million) 0.1% 0.0% • Class 05 – Light Industry ($622 million) 0.3% 0.2% • Class 06 – Business/Other ($29 billion) 15.9% 7.3% • Class 08 – Non-Profit/Recreational ($303 million) 0.2% 0.5% • Class 09 – Farm ($122,000) 0.0% 0.0% • TOTAL un-averaged 2011 Vancouver Roll - $183.6 billion • Total # of Properties – 189,966

  9. Part 2 Municipal Property Tax

  10. Property Tax 101 Municipal tax rate bylaws are required to be adopted before May 15th of each year. 2011 Property Tax Rates (per $1000 Taxable Value

  11. How Municipal Tax Rate is Calculated? • City Council determines revenue requirements and sets (approves) the budget. (Total property taxes to be collected) • Implementation of Tax Deferral by-laws – Land averaging or capping (Vancouver Charter) • Council sets fixed share of the total tax levy for each property class • Tax rate for each class is calculated by: Amount of tax to be collected from the class (City) Total taxable property value of the class (BC Assessment)

  12. Municipal Taxes Payable vs Total Property Tax

  13. Part 3

  14. In 1983, the Province empowered the municipalities to determine property tax allocation for each class of properties.

  15. Assessment Growth In Vancouver

  16. Growth in Properties in Vancouver

  17. Part 4 Hot Issues

  18. Business in Vancouver Source: Metro Vancouver – Key Facts

  19. Land Assessment Averaging Since 1993, implemented 3-year land averaging policy to help mitigate the impact of uneven year-over-year assessment changes Issues: • Land of Strata and non-strata properties determined differently • City of Vancouver statistical analysis of issue is faulty and misleading. • Can result in property taxes being exacerbated rather than mitigated • It overly complicates a rather simple process • There are better ways to deal with market ‘hot spots’

  20. Tax TopographyTax Revenue vs Demand on Services

  21. Cambie Corridor Issues: • From 1990 to 2004, extensive planning and funding of Canada Line by BC Gov’t and Translink • Construction Commences October, 2005 and ends the summer of 2009 putting many street front businesses at risk. • BC Government enables legislation to aid business through tax relief but is not used by the City of Vancouver. • Canada Line Opens August 17, 2009 • To take advantage of this transit investment, the then City embarks on a major planning initiative to develop a land use policy plan for the Cambie Corridor between 16th Avenue and the Fraser. Plan finalized May 9, 2011 • While City plans, land speculation drives up taxes for street retail businesses.

  22. Consumption of Services

  23. Metro Vancouver – 2011 Tax Burden

  24. Number of New Properties

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