One of my recent blog posts addressed the new mortgage stress test rules effective in 2018, and now I want to talk about another important 2018 revision to Vancouver’s real estate laws – City Council approved a property tax increase. The draft budget placed the annual property tax at 3.9% annually, but now this rate has been raised by another 0.34%. The final rate, announced December 12, 2017, is 4.24% per year. What will this money go towards?
Mayor Gregor Robertson believes the added revenue will benefit Vancouver residents in many tangible ways and be redistributed productively. He stated “…this year’s budget maintains the essential services that residents and businesses rely on in their day-to-day lives, while also expanding investments to address our city’s changing needs.
“We’re taking bold action to get more urgently needed affordable housing built, including adding more temporary modular, social and rental housing throughout Vancouver and adding staff to reduce the time it takes to get permits for new housing and renovations.”
The City will use extra tax revenues for initiatives that will benefit Vancouver residents, many of them related to housing and infrastructure. The money will be used for the council-approved Housing Vancouver strategy, including the Empty Homes Tax; support for priority actions regarding Historical Discrimination Against Chinese People in Vancouver, including the Chinatown UNESCO bid; additional social grants; and reduction of development permit wait times.
Additional uses for property tax revenues will be helping the homeless (via better access to shelters and temporary modular homes, as well as addressing the ongoing opioid crisis), recruiting more police and emergency responders, increased funding for childcare, and improving city infrastructure such as roads and snow response, and water and sewer systems.
To better understand the increases, we should use an example. The owners of a median single-family home in Vancouver (valued at $1.823 million) will pay an extra $94 in 2018. Owners of a median strata condo (assessed at $609,000) will pay an extra $32.
The average increase in the past 5 years was 2.3%, although yearly increases seem to be on the rise. 2016 was a noteworthy year for property taxes, with a 3.9% increase that was much greater than inflation. 2018 continues this pattern of increases.
The due date for advance taxes is February 2, 2018. Main taxes are due on July 4, and the home owner grant is due on the same day. If you want to learn more about property taxes, visit the City website, which is a great resource. I’m available to answer any questions you may have about how this could influence your real estate decisions!
Picture Source: City of Vancouver