The tax man cometh! Most of us would rather avoid them altogether, but since taxes are an inconvenient fact of life, it is always better to have a good understanding as to how they are calculated and how and when they are payable and to whom.
While property taxes in Vancouver have been increasing over the past several decades, they are still incredibly low. According to both Zoocasa and Bloomberg, while home values in Vancouver are among the highest in North America, property taxes are the lowest. In a 2018 study, Zoocasa estimated that “Someone who owns a million-dollar property in Vancouver would pay $2,468 in property taxes, compared to $6,355 in Toronto and $10,684 in Ottawa.”
BC Tax Assessments 101
The Province of British Columbia issues tax assessments each year for more than 2 million properties throughout its jurisdiction including, of course, Vancouver. Annual assessments sent out mid-January each year are based on the market value of the property as of the previous July 1. These assessments are then used by multiple authorities to tax property owners and fund government services locally and throughout the Province. The assessment is multiplied by the applicable tax rate for the city or town in British Columbia to determine the annual property tax bill. High-end residential properties in the Province valued above $3,000,000 may also be subject to an additional School Tax.
As of this year, the City of Vancouver reports that approximately 45% of property taxes collected in Vancouver go to fund City services – police and fire departments, emergency services, libraries, parks, recreation and community centers. The balance is directed to Provincial school taxes and other regional services such as transit, drinking water and wastewater treatment.
Important Dates for Property Owners
If you are a new property owner in Vancouver, it is important to be aware of a few important dates in the tax cycle. In Vancouver, an Advance Tax Notice is normally sent out during the last week in November and payment is due on or before the second business day in February. The Advance Tax is equal to one-half of the prior year’s property taxes minus any grants or reductions you may be eligible for. The Main Tax Notice follows in mid-May and is always due on the second business day in July. The Main Tax equals the balance due on the total property tax for the year minus the Advance Tax payment made in February.
All Vancouver property owners must file a declaration each February which will determine if their property is subject to the City’s Empty Homes Tax (a/k/a the Vacancy Tax) used to fund affordable housing initiatives. This tax does not apply to principal residences or to homes rented for at least half the year, but the declaration must be filed annually, nevertheless.
Property Tax Tips
The best way to avoid missing a due date is to register through the City’s website for e-billing which will include reminders and the ability to access past bills and payment history. It is also a great way to check if you are taking advantage of any tax reduction credits available to you. Start by checking on eligibility for homeowner grants available to owners who occupy the unit as their primary residence. There are basic homeowner grants as well as additional reductions available to senior and low-income homeowners. Applications must be filed online each year by July 3rd.
For the past few years, Vancouver has been working to provide temporary relief to taxpayers impacted by significant increases in their property values through land assessment averaging which helps out property owners by phasing in tax increases owing to increases in land value. As a result of the City’s 2019 Land Averaging By-Law, the targeted land value assessment program has been extended from three-year to five-year averaging for certain eligible properties. The Main Tax Notice received in May will indicate whether averaging has been applied to a property and there is an appeal process if you believe your property has been treated unfairly.