The province has rejected a proposal by District of West Vancouver to create separate tax classes for more affordable housing. It has acknowledged that the idea has some merit, but said the change would be confusing and impractical.
Last year in February, West Vancouver councillors supported Councillor Nora Gambioli’s motion asking for the province to give municipalities power to create new tax classes. Doing so would create a better and fair system of taxation while helping local government solve the problem of unaffordable housing, she argued.
In her motion sent to UBCM last year, Gambioli said many municipalities in BC were facing a very significant housing affordability issues. Creating new tax classes, she said, would allow municipalities to set different tax rates for each class based on its individual needs and circumstances.
Presently, municipalities have nine tax classes that can be used to set property taxes: Residential, utilities, supportive housing, major industry, light industry, business, managed forest land, recreational property, non-profit organisation and farm. The basic structure of this property tax system had not been substantially amended since the 1980s, Gambioli said.
“Allowing different residential classes would address vacant houses and non-resident ownership, rental homes and denser forms of housing,” she said.
The province says there is merit to the idea but it is too complicated. In a recent response to West Vancouver, it says BC already had more property classes than most jurisdictions across Canada.
“Any changes would further complicate the assessment process. And unless the Province prescribes the tax rates or a methodology to determine the tax rate ratios, there is no guarantee that the sub-classes or additional classes would be used as the province intended, particularly when the real estate market shifts or when there is a shift in priorities,” it says.
The province also notes that this approach would result in a redistribution of the tax burden within and between classes.
The province says the Ministry of Municipal Affairs and Housing is exploring other ways to address the issue of housing affordability.