Homeowners in Vancouver will be facing a larger-than-expected tax increase this year as city council has voted to shift a portion of the commercial property tax onto residential owners.

Business owners in the city have long complained that they pay up to six times the rate paid by homeowners, and have been lobbying the new city council for a break.

Vancouver city council is shifting some of the tax burden from busines owners to homeowners. (CBC)

On Thursday, councillors voted to shift one per cent of the total tax paid by business onto homeowners. Residential property owners will pay 45 per cent of the city's tax bill, instead of the current 44 per cent.

• LINK: City report on the tax shift (.pdf)

The shift means homeowners, who were already facing a property tax hike of about four per cent, will now be looking at an increase of about 6.5 per cent.

For the average homeowner, Thursday's vote will mean an increase of about $35 a year over and above the tax increase approved by council earlier this month.

• FROM APRIL 7, 2006: Police win funding fight for extra officers

Despite the break, business tax bills will also be higher this year compared to 2005. Fair Tax Coalition co-chair Bob Lawrie, who has been lobbying council on the issue, says the change is too little too late.

"One per cent is akin to giving an aspirin to a terminal cancer patient. We're at a tipping point, and right now I don't think you get it."

Mayor Sam Sullivan admits the break for business is modest, but he worries that going forward any faster could cause a revolt by homeowners.

"I do believe that in the long term, we could be better off by taking this modest approach and avoiding any kind of a backlash by the residential sector," said the mayor, who campaigned on the issue in last year's civic elections.

• LINK: City background on 2006 budget