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| Michael Geller: "Yes, some [British Columbians] may be losing their homeowner grants. But when you stop and think about it, given the number of renters who can’t find an affordable home, why is the provincial government still offering $800 million in grants to 91 per cent of BC homeowners?" Photo Dan Toulgoet |
I have
been both amused, and disturbed, by homeowners’ responses to the 2017 B.C.
property assessments. I am sure I am not alone.
I can’t
help but wonder what those struggling to afford a one-bedroom apartment must be
thinking when they read about homeowners complaining that their homes increased
in value by hundreds of thousands of dollars last year.
Yes, some
may be losing their homeowner grants. But when you stop and think about it,
given the number of renters who can’t find an affordable home, why is the
provincial government still offering $800 million in grants to 91 per cent of BC
homeowners?
Many
homeowners are concerned because they cannot afford to pay their property
taxes. But they refuse to avail themselves of the Property Tax Deferral
Program, which was created precisely to help people like them.
Which
brings me to another complaint. Why does this program offer extremely low
interest rate loans to anyone 55+, regardless of their financial situation?
Surely the program should be means-tested, as it is in most other
jurisdictions.
The
property assessment notices raise some other issues.
Our
property taxation system is based on the market value of a property,
considering its location, size, zoning, and improvements. Other jurisdictions
use different approaches.
In
Vietnam, I was surprised to see many tall, skinny buildings, often in the
middle of nowhere. I was told this was because property taxes were not based on
value, but rather on the quality of a street and the width of the property.
Since narrow properties required shorter roads and services, they were taxed
less.
I think it
is time for our governments to reconsider how they calculate property taxes.
I first
thought about this 20 years ago when I owned a suburban house on a large lot
and a Coal Harbour condominium apartment assessed at a similar value. My house,
on the southern boundary of the city, required significantly longer roads,
sewers and water pipes, compared to the downtown apartment.
There
were also more children in my single-family neighbourhood compared to Coal
Harbour.
However,
I paid a similar amount of taxes on each property.
At a time
when governments are encouraging us to live more sustainable lifestyles in
multi-family housing, why aren’t there separate assessment classes and mill
rates for single-family and multi-family properties?
Some of
you will respond that most apartments are less valuable than houses, and
consequently owners pay lower taxes. This is true.
However,
owners of high-density apartments and low-density houses of the same value, pay
the same taxes.
Why
doesn’t our property tax system better reflect the cost of providing services,
and reward apartment owners with lower taxes?
The
dramatic increase in some single-family property assessments highlights another
issue that needs to be addressed.
These
properties increased in value because the neighbourhood Official Community Plan
(OCP) or zoning was changed to allow multi-family development.
Some
might say, “aren’t these people lucky?” Yes, they are, especially if they are
ready to sell to a developer and move away.
However,
if they want to remain in their house for the foreseeable future, they will be
forced to pay much higher taxes, and many will not be eligible for the Tax
Deferral Program.
As a
planner who would like to see large swaths of single-family zoned land designated
for multi-family development, I am more sympathetic to their plight.Why? I
know that neighbourhood residents will forcefully oppose any density increases
if they will result in higher taxes for those who don’t want to move.
Consequently, politicians will be less likely to approve OCP and zoning
changes.
One
solution could be to modify the way properties are assessed and taxed. The goal
would be to allow single-family properties designated multi-family in an OCP,
or zoned for higher density, to continue to pay lower taxes until a development
permit is taken out for a new development.
This
would likely result in more land zoned for affordable, multi-family housing,
without penalizing those owners who want to remain in their homes.
While
this column looks at residential properties, there is another important
taxation issue that needs further discussion, namely the unfair taxation of
non-residential properties. But that is another topic for another day.
geller@sfu.ca
@michaelgeller
© 2017 Vancouver Courier
- See
more at:
http://www.vancourier.com/opinion/homeowner-s-grant-program-and-property-tax-system-due-for-overhaul-1.7978912#sthash.fwFSmoiR.73QTyg6E.dpuf
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