British Columbia

Vancouver city councillors to consider 4.9 per cent property tax increase

Increase reflects impact of inflation, the province's Employer Health Tax and more money for ageing infrastructure.

Increase reflects impact of inflation, the province's Employer Health Tax and more money for infrastructure

Vancouver City Hall, complex of buildings including a tall, central building with a clock and Canadian flag at the top, is pictured in the day time.
The proposed property tax increase for the City of Vancouver for 2019 is 4.9 per cent, which exceeds the increase from 2018, which was 4.24 per cent. (Jacy Schindel/CBC)

City of Vancouver officials are asking councillors to consider a 4.9 per cent property tax increase for 2019.

Staff cited three reasons for the proposed hike, including inflation, the province's new Employer Health Tax — to replace the elimination of MSP premiums — and the cost of new infrastructure.

If approved, the 4.9 increase would amount to an extra $108 next year for the median homeowner, $41 for the median strata owner and an increase of $193 for the median business property owner.

Staff is proposing an operating budget of $1.5 billion for 2019 and a new capital project budget of $371 million.

In its budget document, the city says there has been a significant gap between expenditure growth and revenue growth, which requires a higher tax increase than what was approved in 2018.

That budget approved an increase of 4.24 per cent, which has higher than the planned 3.9 per cent.

"We face the challenge of maintaining core services at the level our residents and businesses expect, while at the same time making the right investments for the future to ensure we can respond to the pressures and opportunities of a growing city," wrote city manager Sadhu Johnston in the budget document.

The proposed 2019 increase of 4.9 per cent reflects a number of factors, including inflation, (2.2 per cent), the property tax impact of the provincial government's new Employer Health Tax (1.7 per cent), and the additional investments in infrastructure renewal approved in the 2019-2022 Capital Plan (one per cent).

The budget also proposes an 8.7 per cent increase in utility fees.

That hike would amount to an increase of $119 for a median single-family homeowner and a $115 increase for a median business property.

This graphic from a report prepared to explain the 2019 City of Vancouver budget shows proposed property tax increases for median home owners and business property owners. (City of Vancouver)

The Employer Health Tax was announced by the government in February's budget. It will charge companies a percentage of their payroll under a progressive taxation system.

Companies with a payroll under $500,000 will pay nothing and companies with a payroll over $1.5 million will pay 1.95 per cent of their payroll. 

In the spring. the City of Vancouver said it spent $5 million in MSP payments in 2017 but would spent $15 million in 2020 with the payroll tax

Priorities in the 2019 budget include increasing housing supply and affordability. The city says the first year of the Empty Homes Tax program generated close to $30 million in net revenue to help with initiatives.

Councillors will receive a presentation on the 2019 budget on Tuesday at 9:30 a.m. PT.

City officials say that the average combined municipal property tax and utility fees for the median single-family home in 2018 was $3,814. Vancouver came in below that at $3,609.

The city also says over the past 10 years, Vancouver has faced some of the lowest property tax increase across Metro Vancouver. The 10-year average for Vancouver is below three per cent.

This graph shows property tax increases in Vancouver are below the regional average over the past 10 years. (City of Vancouver)