In 1992, the provincial government enacted legislation which provided City Council with two options to mitigate the impacts of uneven year-over-year assessment changes on property taxes and to improve the year-over-year stability and predictability of property taxes. The two options are: three-year land assessment averaging and land assessment phasing. In 1993, Council implemented three-year land assessment averaging for the calculation of annual property taxes for Residential (Class 1) and Business & Other (Class 6) properties; and in 2007, Council extended the same to Light Industrial (Class 5) properties. The City of Vancouver determines each year if land averaging is to be implemented. The program is revenue neutral to the City of Vancouver.
The City of Vancouver is the only municipality in the Province who have adopted three‑year land averaging. Effectively, what this means is the current year’s land assessment is averaged with two years prior, to which you add the current year’s building value in a rising land market. This has the effect of deferring increases in taxes. In no way is land averaging a solution to rising property taxes; rather, it is just a deferral of the inevitable unsustainable level of taxes being paid by many properties in this situation.
A simple example is as follows:
To help understand this issue further: