In 1983, the Province empowered the municipalities to determine the property tax allocation for each class of properties.

Tax rates in British Columbia are also known as Mill Rates.  There are several taxing jurisdictions that obtain property tax from top properties throughout the Province. The main ones are the City of Vancouver (general purpose tax levy); secondly, the Provincial Government (Provincial school tax) and, lastly, TransLink.

Looking at the City of Vancouver tax levy, a levy of 2.12 is applied to residential properties whereas a levy of 9.19 is applied to business properties (9.19 divided by 2.12 equals 4.3). So, for every dollar of property taxes paid by a residential property, a commercial property will pay $4.33. The 4.33 is known as a Tax Rate Ratio.

The other taxing jurisdictions have similar tax rate ratios to the general levy.

2011 Property Tax Rates (per $1,000 in taxable value)

How is the mill rate, or tax rate, determined?

City Council Determines revenue requirements and sets (approves) their annual budget. (This action also determines total property taxes to be collected)

Implementation of any Tax Deferral by-laws takes place at this point in the process such as Land Averaging or Capping

Council sets fixed share of the total tax levy for each property class. This is the point where ‘the tax shift’ is considered.

The fixed share assigned to each class of property is further divided (just like a pie is divided) within the class to determine a proportionate share of the overall tax. The product of this calculation is called the Tax Rate or Mill Rate.

2011 Budget Summary – City of Vancouver

The municipal budget in the City of Vancouver is approximately $1 billion. Some 60% of this budget comes from property taxes. Legislation requires that municipalities have a balanced budget each year. Any variances in revenues from other sources are simply allocated to property taxes so that shortfalls are not created.

This chart demonstrates the amount of property taxes paid to both the Municipality as well as the other taxing jurisdictions for an equally valued property of $1,000,000. As you can see, a $1,000,000 property in the City of Vancouver in the Residential class will pay $4,180 in taxes. Commercial properties will pay an astounding $18,600.  Approximately half the taxes paid are to the City of Vancouver