Vancouver Property Taxes increasing at double the rate of inflation

The city of vancouver is considering a property tax increase of up to 6.3 percent to cover spending over-runs according to this article in the Province newspaper. The increase would be necessary to cover the current budget including proposed Olympics funding and is above and beyond this years 4% increase.

“In operating-budget estimates going before council Tuesday, budget staffer Annette Klein says the city’s funding shortfall amounts to a 4.9-per-cent tax increase. And $7.1 million in new spending could tack on another 1.4-per-cent to the property-tax bill.

“If we don’t make any changes in the budget . . . this is approximately what it would be to run the city,” said Klein. “On top of it, we have these funding requests.”

In July, the NPA-dominated council voted to cap future property-tax hikes at four per cent. “Now, what we’re going to do is keep working on this, and come back with some options on how to get to that four [per cent],” Klein said. Next year’s inflation rate is pegged at two per cent.

Last year, council raised taxes four per cent after a gruelling budget process. It cut costs to social programs and community and arts groups. The city also eliminated the equivalent of 25 full-time jobs.”

There is more coverage in the Vancouver Sun, where Peter Ladner suggests that even though a 6% tax increase is a ‘goulish’ prospect, citizens may tell council they are willing to accept a larger tax increase for more city services. That article also looks at some of the numbers:

“According to the “preliminary estimates” for the city’s 2007 operating budget, the total revenues next year are expected to be $823 million. But, as it stands now, total expenditures are pegged at about $846 million in projected expenditures.

That’s a “potential funding shortfall” of $23.4 million. If council uses a tax hike to fill that massive gap between revenues and expenditures, it would have to impose a 4.9 per cent increase.

Then there’s $7.1 million in new funding requests. The most expensive request comes from the senior managers on the city’s “corporate management team.” Those managers propose that $5 million be allocated next year to a “legacy reserve fund” for the 2010 Winter Olympic and Paralympic Games.

According to the budget document, a total of $20 million would be set aside during the next four years to “provide for the involvement of communities, citizens and businesses; allow the city to meet sustainability objectives; and be host of visitors and residents participating in the Olympic experience.”

25 Comments
newest
oldest most voted
Inline Feedbacks
View all comments
Anonymous
Anonymous
13 years ago

property taxes collected have a link to the value of the property. I failed to see how this new cost could offset the revenue generated by increased prop valuesAs Dingus has already explained, property taxes are not "generated" by property value. They are determined by local government spending, pure and simple. The assessed value of your house just determines what fraction of the total tax bill you pay.The value of your house might drop by 50% next year, but if the city's (and school district, etc) budget goes up by a total of say 5%, that's how much your taxes are going to go up. Ditto 50% increase, or whatever.

Anonymous
Anonymous
13 years ago

I'm definitely in favor of amalgamating the GVRD into a single tax/expenditure system.That would be terrible for Vancouver city propery owners.Here's the problem: Vancouver and Surrey, for example, spend about the same amount per house, so the taxes on the average house are about the same. But the houses in Vancouver are worth a lot more, so the tax rate is a lot lower than in Surrey.If you had a single tax rate GVRD-wide, homeowners in Vancouver and the inner suburbs would get a big tax increase, and the outer suburbs would get a big decrease. IE the very same house in Vancouver would pay much more taxes than the same house in Surrey.

Oscar-le-grouch
Oscar-le-grouch
13 years ago

Taxes, BAH! Stupid, Smelly Taxes. I hate 'em.

Anonymous
Anonymous
13 years ago

The Pope, you make a good point. I made a more 'knee to jerk' comment. It's frustrating when you see such assinine commentary and suggestions. I realize any rational person would laugh at certain comments but I took it a step too far and wrote down what, I'm sure, many people were thinking.

the pope
the pope
13 years ago

Ya'll are so grouchy! I guess the topic of taxes will do that..Lets snipe less and complain more, insults back and forth are boring to read.This comment is aimed at no one in particular, just something for everyone to keep in mind.thanks!

Anonymous
Anonymous
13 years ago

Yes, Warren, I am a coward because I didn't provide a name. You got me. I forgot how you left your ID wide open by using a name…yes, you left it all on the line. Anyway, do you have any stats to support your examples of Burnaby residences using Vancouver facilities, such as Stanley Park? You seem to make braod, sweeping assumptions but I was wondering if you did any actual fact finding. Please link us if you did.Coward? Ouch. Time to grow up, Warren.

WoodenHorse
WoodenHorse
13 years ago

Ok, hacket buried then.I know what you're saying Ken…I know what you're sayin', it bugs me too….but soon you'll be laughin' about it.

ken
ken
13 years ago

alright woodenhorse, I'll take my part of the blame – it was a flip comment, I'm just frustrated with a two week event being an excuse for out of whack prices when it comes to buying and owning.

the pope
the pope
13 years ago

I still believe that rent is the true indicator of property values.I think that people are inclined to pay some premium to own, particularly in a rising market where the focus is on gains not on risk, but what happens if prices are dropping, taxes and maintenance are going up and rents are stagnant (and far below carrying costs).While there obviously is a link between the cost of owning and renting, there have been many times in many places where you can own for less than the cost of rent when you consider a 25% down payment.

WoodenHorse
WoodenHorse
13 years ago

dingus said…Go figure!True enoughdingus said…How can anyone complain about an extra 500 bucks a year when they've made hundreds of thousands tax free in the past couple of years in appreciation!Also very true, but never underestimate the ability of a vancouverite to complain.A lot of what prompted my question was that I've been hearing a lot about cities in the US that have had their income double…surprisingly their expenses doubled at that same rate. I wonder how it'll play out on the way back down? hmmm?

the pope
the pope
13 years ago

Lot of grouchiness going on today, lets try to keep it civil everyone.

WoodenHorse
WoodenHorse
13 years ago

Ever hear of the olympics? My apologizes Ken, but your first post reads like my question can be dismissed simply because of the olympics. While I recognize that the olympics are a new cost to the city, it doesn't wave away the fact that property values have doubled, and property taxes collected have a link to the value of the property. I failed to see how this new cost could offset the revenue generated by increased prop values (unless dingus has it right…which would explain it…revenue this year is $823m in 2000 it was $525m…not a doubling but still an impressive growth)You've said "but you could be less of an ass when it comes to jumping on people for comments" Really, I'd like you to tell me what the statement "Ever hear of the olympics?" added to this conversation? Without… Read more »

Warren
Warren
13 years ago

Warren, I am a Burnaby resident and I can honestly say I do not visit Stanley Park and haven't been there for years. The traffic and congestion is not for me. Vancouver, in general, doesn't offer much more than other areas of the Lowermainland. I rarely venture that way. So, take your 'amalgamating' proposal to Stanley Park and take that long walk off the short part of the sea wall. Have a nice day and swim.Thanks anonymous coward! I'm sure you and the other 5% of people with your opinions don't change the overall stats that much.Burnaby is an expensive/desirable place to live because it shares a big border with Vancouver and doesn't require a bridge to get there. Stanley Park was an example. At least I can swim in the ocean.. try going into Burnaby or Deer Lake and… Read more »

Anonymous
Anonymous
13 years ago

It'll be a looooooong time before rents come within a country mile of mortgage payments in this town.Don't be so down Dingus – once this house of cards collapses (spring anyone?) mortgage payments will get in line with rents, as they should be.Last year we could buy without paying too much more than we rent for, but this year, we're looking at 50% more for a mortgage payment than we pay in rent.I still believe that rent is the true indicator of property values.

dingus
dingus
13 years ago

"When I look at the city's webpage (which is very confusing btw) it doesn't explain this clearly)"Go figure! But it would be a perfect time to push property taxes up a bit to pay for infrastructure and increasing olympic liabilities and contingencies. Expressed as a percentage of property prices, likely taxes here are a relative bargain (compared to, say Winnipeg). How can anyone complain about an extra 500 bucks a year when they've made hundreds of thousands tax free in the past couple of years in appreciation! (Not the way a homeowner would look at it I'm sure). And you're right about rents of course being more market driven. Just because an owner wants a certain level of revenue doesn't mean he'll get it! It'll be a looooooong time before rents come within a country mile of mortgage payments in… Read more »

ken
ken
13 years ago

Thanks, that's very helpful. Why are you wasting your time here when there are crimes you could be solving?…moron.Whoa man, whats with the antagonism? I was simply saying that the cost of hosting the olympics has a direct effect on tax levels here, was that offensive to you? Geez.For what its worth I agree with you on the futility of passing on tax increases to renters with the current pool of illegal suites, but you could be less of an ass when it comes to jumping on people for comments.

Anonymous
Anonymous
13 years ago

Warren, I am a Burnaby resident and I can honestly say I do not visit Stanley Park and haven't been there for years. The traffic and congestion is not for me. Vancouver, in general, doesn't offer much more than other areas of the Lowermainland. I rarely venture that way. So, take your 'amalgamating' proposal to Stanley Park and take that long walk off the short part of the sea wall. Have a nice day and swim.

WoodenHorse
WoodenHorse
13 years ago

ken said… If they're short now….how where they ever on budget????Ever hear of the olympics? Thanks, that's very helpful. Why are you wasting your time here when there are crimes you could be solving?…moron.Dingus: When I look at the city's webpage (which is very confusing btw) it doesn't explain this clearly. Thanks for pointing out that I had the way this works reversed. Re the passing on of costs: Let 'em try. There's no shortage of SFH suites for rents in this city. It's only tight when you look at the legal rental market. Anyhow, according to Sauder, http://tinyurl.com/yxsvf5rents aren't even keeping up with inflation. Roughly -1% growth per year since 2000. I'll take my chances.

dingus
dingus
13 years ago

"Am I misssing something?"Yep. Revenue didn't double with house prices. Though assessed values have increased, the amount of tax revenue isn't based on a flat rate of whatever aggregate property values happen to be. Works the other way round. A revenue need is identified, the tax base determined then a rate applied. And if property taxes go up, expect renters to eat part of that expense too. And I believe, based on mere gossip, that homeowners in other cities pay more in property tax than Vancouver. Must be some info out there somewhere on that that someone less lazy than me can look up.

ken
ken
13 years ago

If they're short now….how where they ever on budget????Ever hear of the olympics?

WoodenHorse
WoodenHorse
13 years ago

What I don't get is how Vancouver was solvent 4-5 yrs ago. House prices have almost doubled in that timeframe…why didn't property tax revenue? If they're short now….how where they ever on budget????Am I misssing something?(btw: I'm a renter, and I got surveyed abouth this. I told them up front "I'm a renter, not a land owner". They didn't care. So I picked the options that involved keeping all city services and raising taxes to cover any shortfall. You can thank me later…really it was no problem at all)

Anonymous
Anonymous
13 years ago

You might want to look for handouts from those rich communities that benefit from sea-to-sky upgrades.I've nothing against rich folks who show off their million$ view properties that back into wilderness, but if there are bush fire and flood, same on you to beg poor communities for 'Bay' or airmiles points.

Anonymous
Anonymous
13 years ago

“what do the other GVRD communities contribute, if anything, to the expenses of the city. I’m definitely in favor of amalgamating the GVRD into a single tax/expenditure system.”
Other communities do not extol brandname-lifestyles such as “yuppy Yaletown”, “emptynester Coal Harbor”, “gay Westend” that gleefully double to triple the property values.

Warren
Warren
13 years ago

What happens when property values fall? As a City of Vancouver property taxpayer… ouch.

Are the rates in Vancouver high compared to other major Canadian cities?

Also, what do the other GVRD communities contribute, if anything, to the expenses of the city. I’m definitely in favor of amalgamating the GVRD into a single tax/expenditure system. You’re telling me people in Burnaby don’t come downtown in droves to take advantage of Stanley Park, etc? About time they started paying for it.

Alright.. I took a few deep breaths and I’m better now.

FredUp
FredUp
13 years ago

Apparently part of the 'Olympic Experience' is paying an ever-increasing amount of property tax. Good going yes-voters!