With all the discussion, misinformation, speculation and confusion about the impact of soaring assessment rates on property taxes, the City thought it was a good idea to public this detailed explanation and offer it to local news outlets. I agree and I hope it calms some of the nerves out there!
COQUITLAM, BC, Jan. 10, 2017 - A higher assessed property value is usually good news for property owners – it means the value of their investment is going up.
But does a higher assessed value also necessarily mean higher property taxes? Not exactly.
When a city plans its budget for the year, the amount it needs to collect (revenue) is based solely on the services it plans to provide (expenditures). Let’s say this amount is $100 million. No matter how much property values go up or down, the City still only needs to collect $100 million to do its job for the year.
In a separate process, the BC Assessment Authority, a provincial body, determines the value of all properties across the province, based on factors such as age, location, size, improvements and the value of recent nearby sales. The City is not responsible for property assessments, however the City is mandated by provincial legislation to tax the homeowners based on the assessed value of their property.
These two processes come together when cities set their tax rate (sometimes referred to as the mill rate): the calculation that determines each property’s share of the cost to run the city that year. If average assessed values go up, the tax rate goes down to compensate. The opposite is true if values decrease. But in the end, working from the example above, only $100 million is collected.
2017 Tax Increase
In Coquitlam, the 2017 tax increase for the average residence is 2.48%, which is in line with the Consumer Price Index (CPI). As the cost of maintaining service levels continues to rise, the City is constantly striving to find efficiencies in the provision of services, as well as other sources of revenue. As such, this is the lowest tax increase in 25 years.
What this means is that if your home’s assessed value went up by the average (33%), your taxes will go up 2.48%. However, if your assessed value increased by more than the average, your taxes will increase by more than 2.48%. However, it still won’t increase at the same percentage as your property assessment increase. Similarly, homes with a below-average increase in their assessment could find themselves paying lower taxes than last year.
The Homeowner Grant is a provincial grant outside of the City’s control, but the City is responsible for administering the Grant on the province’s behalf. The Homeowner Grant assessment threshold was raised in 2017 to $1.6M at which point the grant is gradually reduced by $5 per $1,000 value. Therefore depending on your property assessment, you may not lose the entire grant, just a portion of it.
Municipalities share the publics’ concern about the need to ensure the Homeowner Grant remains available as the assessed value of B.C. real estate continues to rise and we will continue to work with the province on this issue.
Any questions related to your property assessment should be directed to BC Assessment Authority (1-866-825-8322). The deadline to appeal your assessment is Jan. 31.
For information on property taxes in Coquitlam, visit www.coquitlam.ca/propertytaxes.
Rhonda Anderson, Revenue Services Manager