Vancouver City Council has approved a 2% tax shift from non-residential to residential property classes, meaning from businesses to homeowners.
The decision was voted for on Monday night.
The $15.8 million shift will be spread out over the course of three years, from 2019 to 2021.
A 1% shift will take place in 2019, followed by a 0.5% shift in both 2020 and 2021. The changes will be reflected in the city’s 2019 property tax bills, which are being mailed out in May.
The City of Vancouver has provided an example of how taxes will be impacted based on property type:
City Council explains that the tax shift is meant to provide savings for small business owners.
“The influx of investment capital and speculative real estate demand in Vancouver continues to drive up land values… causing hardship for some residents and small businesses,” reads a report from the city’s Director of Finance.
“In the case where a property is under-developed, its assessed value could substantially increase to reflect the value of its development potential.”
One of the report’s focal points is that tenants and small business owners don’t benefit from an increase in property values the same way that its owner would. Rather, they could experience an unexpected increase in expenses over the time that they lease.
City staff have also hinted towards working with an inter-governmental group to provide split assessment, split tax bills, and tax deferral.
City grants, rebates, and property class amendments have also been discussed as a possibility, although some of these options would require action from the provincial government.