The B.C. government is being accused of unfairly taxing Metro Vancouverites by capturing more in school property taxes from rapidly rising real estate prices and denying them the carbon tax rebates that are provided only in rural regions.
The Metro Vancouver regional district board voted Friday to investigate those and other perceived inequities to build a case for reform.
The province sets the tax rates for the school property tax and other property taxes that flow to the province, rather than to the local municipality, Metro or TransLink.
Burnaby Coun. Colleen Jordan questions the formula the province uses to set those rates and argues the amounts paid by home owners in school tax in particular has escalated with soaring values.
“With the huge assessment increases that we’ve had in this region, I believe it’s put us in the position of subsidizing the rest of the province in terms of school tax,” she said.
West Vancouver Mayor Mike Smith said extreme property values have made the problem “quite horrific” in his community.
“West Vancouver, just like with TransLink (property taxes), are carrying everybody else on their back, paying far more school taxes than the cost to run our schools because of our high assessments.”
The complaints go beyond non-municipal property taxes.
Metro board chair Greg Moore said the provincial government’s plan to impose a 911 call answer levy on all phone lines is also unfair because it will mainly extract money from Metro residents and businesess to fund 911 upgrades in other regions.
“We’ll be paying substantially more compared to the rest of the province,” he said.
Rising real estate values have left a growing number of Lower Mainland homes failing to qualify for the home owner grant, which provides a $570 credit against property taxes when homes are valued at less than $1.2 million. (The amount of the basic grant declines for properties above that threshold and is zero above $1.314 million.)
“A lot of people are going to be realizing substantial increases in the amount of property tax they need to pay,” White Rock Mayor Wayne Baldwin said.
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Vancouver Coun. Raymond Louis noted 95 per cent of B.C. homes got the home owner grant in 2012 but that’s dropped to about 91 per cent as more properties exceed the maximum value to qualify.
He said roughly $30 million less in the grants is now paid out by the province, and has come mainly at the expense of Metro home owners.
“Where is that money going?” Louis asked. “It’s essentially Metro Vancouver that’s not receiving that home owner grant now. Why aren’t we getting that investment back into Metro Vancouver?”
Carbon tax breaks are another bone of contention for the urban politicians.
Everyone in B.C. pays the carbon tax, Moore noted, but those who live in rural areas outside Metro Vancouver, the Fraser Valley or the Capital Regional District get an extra $200 top up of their home owner grant to ease the pain, referred to as the northern and rural home owner benefit.
“Property tax is just one issue,” Moore said. “We’re looking at multiple examples of us seeming to overpay into the system to subsidize other parts of it.”
Burnaby Mayor Derek Corrigan said providing a carbon tax offset for the north in the form of a higher home owner grant appears to reward people in those areas for emitting more carbon.
Finance ministry spokesman Jamie Edwardson said that extra $200 is provided from the carbon tax revenues to rural and northern residents to reflect the fact public transit may not be as good in their communities, and that home heating costs tend to be higher.
As for school property tax rates, Edwardson said they are set for each school district and are adjusted to make up for significant increases in assessed values.
In Surrey, he said, the provincial residential school tax rate was decreased seven per cent in 2015, resulting in a house of average assessment paying $978 in school tax, down slightly from $981 the previous year. He said many other districts also saw marginal decreases that year.