With the rise in the value of houses this year, the West Vancouver property tax rate is not as high as it was in 2006. In fact, it is the lowest in the lower mainland municipalities and in North America.
Lowest in North America
Property taxes are a form of taxation that are collected by local taxing authorities and distributed to the provincial government. They are used to pay for local services and infrastructure. There are also other property taxes, such as school and utility taxes, which are collected by the provincial government.
A good way to figure out what you’re paying in property taxes is to look at the overall value of your house. This can vary considerably from region to region and city to city. For instance, the property tax rate in Port Moody is nearly one percent while the rate in Vancouver is about one thousandth of a percent.
Low property taxes are a big part of what makes real estate in Vancouver attractive. However, they do have some negative economic effects. While homeowners in Vancouver are getting a cheap ride, renters are making up over half of the city’s households. And, as a result, there is a huge need for more housing.
The cost of housing in British Columbia has increased dramatically. This has made it prohibitively expensive for young people to live in the province. But, there are solutions. One of these is the property tax, which can help to offset income taxes for working class Canadians.
Lowest in other lower-Mainland municipalities
The West Vancouver property tax rate is one of the lowest in the Lower Mainland. While the rate is calculated using a $1000 assessment, the amount you pay depends on how much your property is worth. Those with homes valued over $4 million will pay the highest rates.
It’s not the most affordable place to live in the province. In fact, the city is the fifth most expensive to live in in BC, according to a survey from the Fraser Valley Chamber of Commerce.
While the city isn’t necessarily the best place to buy a house, its property taxes are lower than those of most of the rest of the Lower Mainland. As with most BC municipalities, the property tax rate isn’t determined by the size of the population. Rather, it’s based on a number of service levies.
One of the most significant factors is the percentage of the municipal tax bill that’s paid by homeowners outside of West Vancouver. Across the entire Lower Mainland, 40 to 50 percent of the overall tax bill isn’t paid by residents. This adds to the challenge facing West Vancouver councillors who must decide how best to use that money.
The tax-paying public in West Vancouver also has to deal with the fact that the city has aging infrastructure, including sidewalks, parks, and streets. As such, it’s important to develop a long-term plan for maintenance and replacement.
House values rose this year
The West Vancouver property tax rate rose by almost three per cent this year. Despite this increase, the region still had the lowest property tax rate in Canada. This is because the government has invested hundreds of millions of dollars in social housing and hotels.
But the real estate market in Vancouver is forecasting higher prices. A major paradox is that speculative investment has helped drive the price rise. In the past decade, British Columbia’s property values have almost doubled. It’s now becoming prohibitively expensive for renters of all ages.
Prices in Vancouver have reached a new plateau. The benchmark price for a single-family house in Vancouver was $2,118,600 in 2019. According to Capital Economics, this should continue in 2021 and 2022.
Some of the factors contributing to this trend are low tax rates and a dearth of available housing. As more people enter the province, prices will continue to rise. And as demand for life in BC increases, more houses will need to be built.
Another problem is that the province has been encouraging speculation through a homeowner grant. This grants homeowners an exemption from capital gains taxes on their principal residence. Speculative investors are able to buy more homes for less money, which helps drive up the price of homes.
But in the end, the most powerful way to fight speculative investment is to build enough new homes. If the number of homes available continues to be low, there won’t be enough buyers to keep up with the demand.
Rent freeze expires in 2022
The state of California has been in the throes of a housing crisis for years. Many renters were left with fewer jobs, lower wages, and no money to pay the bills. In the last year alone, rents have risen by over 30%, and some landlords are opting to evict tenants rather than fix their properties.
One way to address the problem is to let individual landlords decide for themselves how much to increase their rental rates. However, the state does not permit the raising of rents to levels seen in the past. As such, landlords can only increase their prices once per year.
In the last few months, lawmakers have taken steps to mitigate the effects of the housing crisis, and they have also introduced legislation to make the statewide housing plan a bit more transparent. This includes allowing more information to be gleaned from the Landlord and Tenant Board’s online tool, Navigate. Several lawmakers have also considered declaring an emergency, and have proposed new laws to help fend off rent jackers.
A number of states have also recently passed laws that improve the lives of renters, including new tax credits to reduce the costs of buying a home, and expanded Medicaid to help families cope with the soaring costs of health care. These measures are designed to help reduce the strain on local governments, and are aimed at easing the pain of low-income households.
Class 4 property is entitled to a tax credit
The Vancouver city council has passed its budget after hours of debate and wrangling. During the course of the discussion, an additional layer of tax was imposed on higher valued properties. This extra tax has been paid by a small group of homeowners in a few neighborhoods. But the extra tax will increase the total municipal taxes on West Vancouver residents by 4.29 per cent by 2022.
According to the Canadian Housing Statistics Program, in Vancouver’s census metropolitan area, the median property assessment value was more than nine times higher than the owner’s income. In fact, compared to the Toronto CMA, the CMA had the highest value-to-income ratio among all other CMAs.
One possible explanation for the high value-to-income ratio is that the properties owned by the lowest income earners were co-owned with non-residents. Another possible reason is that the owners had purchased their property at a time when the assessed values were lower.
Property owners in the upper quintiles own fewer condominium apartments. However, these properties also have a higher value-to-income ratio than solely resident properties. Perhaps the owner has no longer had a mortgage, or was earning income from a job outside of Canada.
Vancouver has been a beneficiary of large injections of money from the province to improve the housing stock. Some of this money has gone toward housing projects for the homeless. Other money has been used to purchase hotels and other social housing.
Unpaid property tax can lead to a property tax lien
The government can seize your property if you owe unpaid property taxes. They can also sell your lien at a tax lien auction, which is a real estate tax sale that takes place in the physical or online arena.
In the West Vancouver area, a couple owed the province $69,000 in unpaid property taxes. The wife’s tax form was sent to her old address, but the province billed her the maximum tax rate. Fortunately, the wife was able to get her tax forms corrected. However, she still had the remaining bill of about $6,000.
While you can’t get your property back, you can avoid foreclosure by paying your property taxes on time. Typically, they are between 0.5% and 2.5% of the assessed value of the home.
But, if you don’t pay your taxes by the 181st day, you can be subject to a penalty. This is called the late payment penalty. It’s the legislative way of saying that you’ll have to pay 1% more each month until you get it paid off in full.
There are a number of special payment options available to you. If you qualify, you can sign up for a program that lets you defer your taxes until 2023. These programs include those for persons 65 and older, disabled veterans, and others.
To make sure you’re taking advantage of the best available options, make sure you apply before your taxes are due. Also, don’t forget to ask questions. You can find information on the Department of Finance’s Help Center.
Among many other things, David A. Grantham is a contributing author to UmassExtension West Vancouver Blo. He is a renowned expert on real estate in BC.
Born in North Vancouver, Louisiana, Dr. Grantham grew up in Lower Lonsdale. He then went on to complete his business degree at the University British Columbia. As of this writing, Grantham has completed over 100 projects, including the development of a high rise building in Vancouver.
He is a husband, father, son, brother, and friend. He was a dedicated outdoorsman and enjoyed sports such as hunting, fishing, scuba diving, and snow skiing. His wife, Alison Grantham, and their two daughters survived him. He is survived by his wife Alison Martin Grantham and two daughters.