As I noted in part one of this look at our 2011 residential taxes, in a perfect world the owners of a home valued at $100,000 in 2010 and now worth only $80,000 – according to the BC Assessment Authority – could look forward to a roughly $150 drop in their property tax bill this year.
And the city would generously contribute $48 of that.
But as I suggested last time, in the real world of local/regional taxation, the taxing authorities – including the city – will simply jack up the tax rate to ensure they take the same amount of money from you and I as they did last year.
Meaning we will pay the same amount even though our homes are worth 20 per cent less.
But if they do, there’s offsetting good news – the provincial government increased the homeowner grant by $200 this year.
So even if council – and all the other taxing authorities – do up the tax rate to take the same amount from us this year, we will still end up $200 to the good.
In a perfect world.
The $200 to the good scenario assumes that council will settle for the same amount of revenue as last year.
But if they do, they are still going to be short of money because of built in increases in wages/salaries and across the board inflationary pressures – PNG’s hike in natural gas rates for example.
So, unless they make cuts, council will have to increase tax rates not only enough to cover the drop in assessed values, but also the amount needed to offset their unwillingness to make those cuts.
And in an election year no-one likes to make cuts.
Translated, that means council will raid your homeowner grant increase to bridge the gap.
Don’t think they will do that?
The last time the homeowners grant was increased was in 2006 when it went up by $100.
That year council hiked residential taxation by 10 per cent, essentially arguing that it wasn’t that bad because it didn’t take all of the grant increase.
Will history repeat itself?
We’ll soon see.