Business in Vancouver – the Last 10 years
The importance of commercial property tax rates is directly linked to employment and economic growth in Vancouver. Employment is essential to the economic health of citizens. Although Commercial property taxes are the responsibility of landowners the taxes are paid for by employer tenants and directly effect the profitability and growth of the business sector.
Over the past 13 years, Vancouver city data clearly points to a stagnant or declining business base which is not keeping pace with population growth. The concern is that we have poor employment prospects ahead, especially for our youth. The current trend is unsustainable.
Vancouver’s employment sector needs to grow. Not just for employment but to sustain the tax base of the city for which business pays the largest share. Under our current property tax regime, a shrinking commercial tax roll means fewer businesses are paying ever increasing property taxes.
As the population in Vancouver increases it is essential to retain existing businesses and to increase the number of businesses. Continuing to shift taxes provides a clear signal to both existing and new businesses that Vancouver is a good place to locate and expand.
Facts and Additional Information
Note: all data is based on official City of Vancouver and government information
Attracting and retaining businesses is competitive. Every municipality wants to increase employment and their commercial tax base. Vancouver competes with other municipalities in Metro Vancouver where employers pay an average of 34% of the tax levy compared to 47.5% in Vancouver. Vancouver must be closer to parity.
The net number of business licences issued by the City of Vancouver over the last 13 years (1998 to 2010) has only increased by 46 while our population has increased by 83,267 during this same period.
In the last 7 years (2005 to 2011) the number of commercial properties built in Vancouver has increased by 215 while during the same period, the number of residential properties built has increased by 23,789.
Residential properties make up 83.4% of the assessed value and employer properties make up 15.9% of the assessed value and yet employers pay 47.5% of the property taxes.
Property taxes for commercial properties are paid by the tenants, not the commercial property owner. Most of these tenants are local neighbourhood merchants and businesses who create and provide jobs in close to home.
Employers recognize they should be paying higher property taxes than residential property owners, but the system is out of balance. It is no longer fair, reasonable or sustainable. Currently commercial property owners pay 450% higher for the same assessed property. For example: a residential property owner with an assessed value of $1,000,000 will pay $4,180 in municipal property taxes while the employer tenant will pay a disproportionate $18,664!
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