Derrick Penner, Vancouver Sun, January 4, 2016
Increases in property assessments pushed as many as 55,000 British Columbia homeowners over last year’s $1.1 million threshold for receiving the provincial homeowners grant on their property tax prompting a new call for the government to revise the program to cushion the impact of a hot real estate market.
BC Assessment on Monday released 2016 assessments for some two million properties and hot markets in the Metro Vancouver pushed residential assessed values to some of their biggest increases in more than 30 years, said Jason Grant, area assessor for greater Vancouver.
“You would have to go back to 1980 and (there were) probably only two or three times when the single-family market has moved by this much this quickly,” Grant said in an interview.
BC Assessment doesn’t announce average assessment increases in each community but does pick out examples deemed to be somewhat representative, which across Metro Vancouver showed increases of 12 to 28 per cent on detached homes.
Property-information firm Landcor Data Corp crunched numbers from the assessment for The Sun, which showed big jumps in specific neighbourhoods in Vancouver, Burnaby, North Vancouver and Richmond that pushed averages over thresholds that would begin to eliminate the $570-per-qualifying-household grant, based on 2015 amounts.
Figures provided by BC Assessment show that 17,600 additional residential properties were pushed over that $1.1 million level on their 2016 assessments. Some 37,900 more were pushed over the $1.25 million limit for eligibility altogether.
Those calculations, however, don’t filter out properties that are not an owner’s principal residence, which would also not qualify for the grant.
Without any change to the thresholds set last year, homeowners with properties valued over $1.1 million would start to see the value of their $570 grant decline by $5 per $1,000 of assessed value up to the level of $1.25 million, at which point the grant is eliminated entirely.
In Burnaby, the Multiple Listing Service-defined neighbourhood of Brentwood Park, for instance, saw the average assessment of detached homes rise 31 per cent to $1.29 million from $989,000 a year ago.
Detached houses in Vancouver’s Renfrew heights neighbourhood saw 2016 assessments shoot up 27 per cent to $1.18 million from $936,000 in 2015, according to the data analysis by Landcor.
“Single-family properties (close) to Vancouver, and by that I mean 30 minutes drive, have performed extremely well this year in terms of market movement,” Grant said.
Also according to the Landcor analysis, North Vancouver’s Central Lonsdale saw average detached home assessments shoot up 22 per cent to $1.19 million from $984,000. In Richmond’s South Arm, the jump was 20 per cent to $1.09 million from $913,138.
However, the increases put the province’s homeowners grant, which is designed to cushion property owners of modest means from big increases in assessments, back in the spotlight.
BC Assessment’s figures show that municipalities use the assessed values to set property taxes. They adjust property-tax rates up or down based on average changes in assessed value so that they don’t reap an unintended windfall from big increases.
However, larger-than-average increases in assessments can hit taxpayers in specific neighbourhoods that are hot markets.
And homeowners risk losing that homeowners grant when the property market skyrockets, which may inhibit their ability to pay the tax.
“I maintain that the program the province currently has needs to be more responsive,” said Vancouver Coun. Raymond Louie.
Louie said, pointing out that municipalities are only one of seven government organizations, including TransLink and the Ministry of Education, that use assessments to make levies on homeowners.
A fairer way, he said, might be to establish the proportion of the home-owning population that the grant should apply to based on income and make sure they qualify, regardless of big swings in market prices.
In December, the City of Burnaby sent a letter to Peter Fassbender, the Minister of Community, Sport and Cultural Development, who is responsible for the homeowners grant program, requesting that assessments be frozen at 2015 levels considering the huge swings in property values.
Mayor Derek Corrigan told the Burnaby Now that the province needs “to hear loud and clear from the citizens that this is a big issue, that it has a big impact and they’re not going to accept it.”
Fassbender was not available for an interview Monday but in an emailed statement said a freeze on assessments won’t be on the table because it would have to be applied provincewide and municipalities have options to mitigate tax impacts.
Outside of Metro Vancouver, Grant said increases in assessments were more in the range of zero to 10 per cent. In some areas, notably resource towns, assessments dropped.
Fassbender said the province “will work closely with municipalities to help address any inequities or challenges” presented by the 2016 assessments.
And Fassbender noted there are other programs homeowners, especially seniors, can access, such as tax deferrals.