Get the Facts Right, Property Taxes 101

What are property taxes?
An annual local government tax levied on real property based on BC Assessment’s estimated market value. Local governments calculate the tax by dividing the annual budget by total assessed property values. In rural areas, the province assigns the tax rate. Rates vary among property classes: residential, business, light and heavy industry, farm, recreation, utility and managed forest land.

The assessed value of each property is typically determined annually by BC Assessment, as of the previous July 1.

Where do I find out what my property taxes are?
Look at your tax notice which was delivered by mail in late May or early June. You can also check your local government web site, which may have information. For example, the City of Vancouver has a property tax web page  where you can find your account balance. For information contact your local government tax office or BC OnLine.

What happens if I don’t get a tax notice?
You must pay whether or not you have received a notice. Contact your local government finance department and arrange for a duplicate notice. You must ensure that your local government and BC Assessment have your correct mailing address.

Five misconceptions about property taxes
1.  You can appeal property taxes. No. You can appeal your assessment, not your taxes. You annually receive your assessment the first week of January and must appeal by January 31.

2.  An appeal will change the market value. The market value may not correlate to the assessed value. BC Assessment typically assesses properties as of the previous July 1. A REALTOR® valuing a home now – 11 months later – may find the market has changed, the home has had an addition or the street has been re-zoned, all of which affect value.

3.  If you just bought a home, the previous owners are liable for taxes. No. When you buy a property you become liable for all outstanding taxes.

4.  New home owners can claim the Home Owner Grant. No. New home owners cannot claim the Home Owner Grant if the seller paid the taxes or if the new home owner claimed a grant on another property.

5.  You haven’t claimed your Home Owner Grant for a few years and you want to claim it all now. You’re out of luck. You can claim the grant amount only for the previous year.

What does your property tax bill include?

Municipal tax – is set by council and staff in the local government’s annual budget process and is based on revenue needs for infrastructure and services.

Regional district tax – is set by the regional districts for key services such as regional water and sewage treatment. For example, Metro Vancouver tells their local governments what their revenue needs are, and the local governments collect on their behalf. In rural areas, the province (Surveyor of Taxes) collects for regional districts.

School tax – is set by the BC Government to fund schools and varies by local government. It’s paid by residential and non-residential property owners.

Hospital tax – is set by the regional hospital districts to help partially fund local health facilities. For example, in Metro Vancouver hospitals are funded by the province, not by property taxes. Outside Metro Vancouver, hospital taxes are still levied.

Other taxes – are set by local taxing authorities and collected by the local government to fund BC Assessment, the Municipal Finance Authority and TransLink.

How to pay property taxes
Visit your local government’s web site for details on how to pay. Then check the due date on your tax notice, complete the Home Owner Grant application and then pay:

  online by www.epost.ca: you must first sign up for this free online Canada Post delivery service that lets you pay electronically. When you pay and claim your Home Owner Grant electronically, you’ll receive a receipt with a confirmation number
•  in person: take your tax notice and a credit or debit card, your cheque book, a certified cheque or cash to your local government finance department. Check business hours
•  at the drop box: located near the front entrance of most City Hall offices. There may be drop boxes in alternate locations as well
•  by mail: your payment must arrive at City Hall by the due date on your tax notice
•  at a financial institution: most banks and credit unions accept tax payments in person. You can also pay online or by phone through your bank or credit union. Remember to submit your Home Owner Grant form directly to City Hall
•  through your mortgage: your mortgage company can pay your property taxes on your behalf if you arrange for this service beforehand
•  by installments: check with your local government to see if prepayment options are offered.  

For an explanation of a sample property tax notice, click here.

If a home owner doesn't pay their property taxes

If a property owner doesn't pay their property taxes by the due date (cehck the tax notice), and doesn't submit the Home Owner Grant form by the due date, there are serious consequences.

The property owner will be charged a percentage of outstanding taxes as a penalty. If taxes are unpaid after three consecutive years, the property may be auctioned. Tax sale dates and processes can be found on local government web sites. 

Information, Courtesy of the GVREB.

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Cristian Riquelme

Cristian Riquelme

Associate
CENTURY 21 Coastal Realty Ltd.
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