So full disclosure, the internet did not go wild when Metro Vancouver released its report on provincial property based taxes; but now that I have your attention I hope you can stay with me for a moment. I recognize that property taxes is not the most exciting topic going around, but Metro Vancouver’s recent report on provincial property based taxes is important and clearly demonstrates that Metro Vancouver residents are disproportionately paying higher provincial property taxes than the rest of the province.
Now some of you may be scratching your head at this point and thinking “don’t we pay our property taxes to our local governments?” It’s a good question. Despite the fact that I receive 100% of the grief when residents receive their property tax bill in late spring, approximately 50% of a typical property tax bill is controlled and collected on behalf of the provincial government or other agencies. And the problem for Metro Vancouver residents is that we are paying a disproportionate share of this portion of property taxes. Metro Vancouver represents approximately 50% of the population of the province, but in some instances we are paying about 75% of property based related taxes.
So why is this happening?
Although Metro Vancouver has historically paid a higher share of provincial property based taxes, this inequity has grown substantially over the past few years. The reason for this has been the significant increase in property values in the region. Assessed values make up the basis for the collection of property taxes, so the changes in the real estate market in Metro Vancouver relative to the changes in the rest of the province has had a huge impact on the proportion of these taxes that our region pays.
How are things unequal?
-Because of the situation described above, Metro Vancouver residents pay a property school tax that is 3 times higher than the rest of the province.
-Metro Vancouver residents contribute approximately 61% of school expenditures through their property taxes, whereas the rest of the province only contributes around 31%.
Home Owner Grants:
-Every year the provincial government provides a homeowner grant to property owners. To be eligible for these grants, properties must not exceed an assessed value of $1.6 million. This inequity does not have a huge impact on a city like New Westminster, but across the region it does have an impact. In Metro Vancouver 82% of property’s are eligible for the grant, while across the province as a whole 91% are eligible.
– On top of the above inequity on the home owners grant, there is an additional Northern and Rural Home Owner Grant. The main criteria for this $200 provincial grant are that you don’t live in Greater Vancouver or Greater Victoria regions. Essentially the province gives property owners $200 for not living in Metro Vancouver or Victoria.
Property Transfer Tax
-In the last two years revenue from the Provincial Property Transfer Tax has almost doubled. This windfall of new revenue for the provincial government has largely come from the Metro Vancouver region.
-Metro Vancouver currently contributes around 75% of the provinces PTT revenue, $1.1 billion a year more than the rest of the province combined. It would be nice to see some of this revenue coming back to the region to assist us in dealing with our transportation and affordable housing challenges that are unique to Metro Vancouver.
Shouldn’t Metro Vancouver be helping out some of the less prosperous regions of the province?
I agree with the sentiment behind this question and agree that Metro Vancouver has a role to play in helping support some of the less prosperous parts of the province. The problem is, the way the system is set up now, not only is Metro Vancouver supporting some of the less prosperous regions in the province, and we are also subsidizing some very prosperous regions outside Metro Vancouver. We are also doing this during a time when our region is facing an affordability crisis that is not being felt to the same degree in other parts of the province. I believe wealth from Metro Vancouver as an example should be used to equalize our education system across the province, having said that I have a hard time buying that we should also be subsidizing some wealthy communities in places like the Interior.