Property tax is a tax based on the assessed value of a property. If you own a property, you will have to pay property tax. It is used to pay for city services such as police, the fire department, and public transit as well as elementary and secondary education.
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If you own property or mobile homes in BC, you will have to pay an annual property tax. The total tax will depend on where you live and how much your home is assessed at.
Generally, your tax will consist of a Municipal Tax as determined by your municipality and a School Tax that depends on your specific school district.
Municipal property tax rates are determined based on the budget needs of the municipality. Municipalities consider their expected spending and other revenue and use property taxes to make up for the rest. The specific property tax rate for a certain year depends on the budget of the municipality and its total assessment base (their tax base). If more tax revenue is necessary, tax rates will need to go up, and vice-versa.
The School Tax is less transparent. Every year, BC’s Minister of Finance determines the total amount needed from the School Tax. The Lieutenant Governor in Council then has until May 4th to determine the specific tax rates for each school district. School tax rates can differ between school districts as well as in the districts themselves.
If you own a residential property assessed at more than $3 million, you will have to pay an additional school tax. You will also still have to pay the base school tax rate on the whole value.
As of 2020, you would have to pay:
* For mortgages of at least $500,000 with down payment under 20%.
WOWA assumes no liability for the accuracy of information presented.
† For mortgages of at least $500,000 over a 25-year amortization period.
Properties in BC are assessed every year by BC Assessment. Most properties are assessed using a market value-based approach. There are three ways that BC Assessment uses to determine a property’s market value:
Direct Comparison Approach
Residential properties are valued under this approach. This compares the sales of similar properties in the assessment year to determine a valuation for the property. The assessed value may not equal the actual market value or sale value of a property.
Unique and rarely traded properties are valued under this approach. This uses the cost of the property if someone were to rebuild it to determine a valuation for the property minus depreciation due to age or other factors. This includes the price of the land and the price of all improvements (e.g. buildings) on top of it. While this takes into account the market value of the land, it does not consider the market value of the property as a whole.
For properties that are dedicated to generating income like rental properties or offices, an income-based approach is used. This approach uses the income generated by the property as well as the sales price to determine its assessed value.
Property assessments in BC are conducted annually and must be based on the value of the property on July 1st of the previous year. For example, a 2020 property assessment will be based on the value of the property on July 1st, 2019. This is called the Valuation Date.
Another important date is the Condition Date. When considering the value of a property, municipalities will take into account the prices on July 1st, the valuation date, but based off the condition of the property on October 31st. For example, if you added a new garage to your home in September, your property assessment will compare prices on July 1st of homes with a garage.
By December 31st, assessment notices will be completed and mailed to property owners.
Property taxes are the largest source of revenue for most municipalities. In the 2020 fiscal year, property taxes are expected to make up 55.13% of the City of Vancouver’s operating budget