Vancouver needs a 9% annual property tax hike to balance the books

Got an extra $116 lying around? A new report set to go before Vancouver City Hall suggests that an average property tax increase of 9% annually would be needed to balance the budget in the years ahead.

And that would mean property owners would be forced to pay up.

It comes after a shocking 10.7% average property tax hike for 2023, which was controversially approved by Vancouver City Council in late February despite critics questioning the timing as many deal with inflation and the high cost of living.

However, as residents struggle, those financial pressures appear to be hitting the city as well.

The 2024-2028 Budget Outlook examined the current revenue streams and found the outlook for operating revenue growth will be between 3% and 5%.

While that’s optimistic, it’s not all roses. Vancouver has seen a decrease in its revenue streams in several key areas, including parking.

The report says behavioural changes from the pandemic have led to fewer dollars in the city’s coffers.

“These financial challenges have exceeded the City’s ongoing measures to reduce
costs, resulting in higher than historical tax increases. To balance the budget over the Outlook period at the current state service levels without further actions, an average property tax increase of ~9% each year would be needed, which equates to an additional $116 per year for a median strata property,” the report said.

Adding that it would also go up $198 for median overall residential, $304 for median single-family, and $511 for median commercial property owners.

“This reflects only the City portion of the tax bill, and does not include increases from other taxing authorities. Taxes from new development are estimated to increase by $5 million annually representing less than 1% of our property tax base,” the report said.

The expenditures for the next five years are predicted at $730 million per year and “this level of project delivery is a significant increase from past levels and is required to meet asset renewal requirements, provide new amenities in response to population growth, and address City goals such as the Climate Emergency Action Plan.”

Plus, Vancouver has to foot the bill for some expensive infrastructure and public amenities renewals in the coming years.

“Utility fees are estimated to increase by ~10% annually on average for the next five
years, based on Metro Vancouver regional utility charge forecasts and the increased
pace to replace and maintain the city’s infrastructure and assets,” the report reads.

In the short term, the report suggests continuing to increase the cost of monthly parking permits for residents, expanding pay parking locations, and making food trucks pay more money to park on the city streets.

The report also states that spending will increase to deliver on Mayor Ken Sim’s promise of hiring more police officers.

A special budget task force has been created to examine costs; however, the Vancouver Police Department will not be part of the analysis, nor will the Vancouver Park Board or Vancouver Public Library, despite them accounting for a massive amount of the budget.

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