Strength in numbers
Concerned citizens come out in support of school tax surcharge motion.
VANCOUVER (December 12, 2018) - Dozens of Vancouver residents came to City Hall today to show their support for Councillor Rebecca Bligh’s motion resolving that the City send a letter to the provincial government asking them to withdraw the proposed surcharge on the provincial school tax.
The group, organized by community organization STEPUP, pointed out that this school tax surcharge unfairly targets a specific group of Vancouver homeowners. Nearly 22,000 Vancouver homes are impacted by this tax, more than any other municipality in the province.
Mayor and Council should also be concerned that this steep increase encroaches upon municipal revenue sources. In fact, the new school tax surcharge amounts to approximately $118 Million, or 29% of total 2018 Vancouver municipal budget allocated to residential class properties.
“We are pleased that Mayor and Council voted today to stand up for their constituents, and push back on the BC NDP and this school tax surcharge,” said Mary Lavin, who helped to organize the peaceful rally. “This surcharge unfairly targets a specific group of Vancouver residents. For some families, the impact could be a 33% increase on their overall property tax bill.”
STEPUP will continue to advocate on behalf of residents until the school tax surcharge is repealed.
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SCHOOL TAX SURCHARGE
21,425 homes* in the City of Vancouver are impacted by the school tax surcharge. These homeowners will pay an estimated $118 Million in additional property tax in 2019.
The increase is neither “fair” nor “modest,” but a 200% to 400% increase in provincial property tax rates in Vancouver.
Current provincial tax rate on our homes
Proposed tax rate on home value between $3-$4m
Proposed tax rate on home value greater than $4m
Current PROVINCIAL property taxes collected
Proposed PROVINCIAL property taxes to be collected
When averaging all properties impacted in the City of Vancouver, the numbers are staggering.
The average increase in property tax, across all impacted properties in Vancouver is 33%;
For 15,095 families, this is an increase of up to $5,000 per year;
For 920 homeowners, their property tax bill will double or more;
For the highest value homeowners, the additional property tax will be over $50,000 per year.
It’s important to remember that property taxes must be paid with after-tax income. For a family to pay an additional $5,000 property tax, they may have to have an additional income of $10,000 or more.
The school tax surcharge encroaches on the municipality’s ability to raise revenues.
The new school tax surcharge amounts to approximately $118 Million, or 29% of total 2018 Vancouver municipal budget allocated to residential class properties. By comparison, the City of Vancouver’s proposed 4.9% property tax increase on a budget of $750 Million amounts to approximately $35 Million in revenues.
The school tax surcharge disproportionately targets the City of Vancouver.
The new school tax surcharge results in approximately $118 Million in revenue from 21,425 Vancouver homes, out of an expected $250 Million in revenue from the new tax province-wide.
Vancouver is already contributing more than its share to provincial coffers.
Vancouver is the only municipality in B.C. collecting enough school tax revenue to support their annual school budgets, at 111% of budget collected. The new school tax surcharge would bring this to 134% of budget being collected. The majority of municipalities collect 50% or less in school tax revenue, compared to their annual budgets.
Increased taxes are eroding equity in higher end homes.
By conservative estimates, new taxes on residential values have wiped out $10 billion in residential property owner’s equity on properties above $3 Million in the past year. At the same time, property values for residential properties below $3 Million in value have increased roughly 10%.
Families downsizing to lower value homes has the effect of driving up the price of more affordable housing.
Homeowners will not realize the impact of the new school tax surcharge until property tax notices arrive in July 2019.
*Data analysis performed by Paul Sullivan of Burgess Cawley Sullivan & Associates Ltd., the largest private property tax consulting firm in Canada.