Tax Rates are Multipliers – Nothing More!
There are those who erroneously believe that a higher tax
rate equals more taxes paid. That is simply incorrect. The plain truth is that
tax rate is simply a multiplier. Each year, after Council sets the budget for
the upcoming year, finance staff takes the combined assessed value of all
properties in the municipality and divides the required revenue, as set by the
budget, by total assessed property values, and arrives at a “Tax Rate”. It
should also be noted that different rates are set for each of the tax classes
(such as business or farm).
A good example to illustrate the flaw in using Rate as a
comparator between municipalities would be a comparison between West Vancouver
(the most expensive real estate in the province) and Cache Creek. I am using
figures by the Ministry of Community, Sport and Cultural Development, 2018, and
based on a “Representative House”.
The logic put forward by those who use Tax Rate as a
comparator will be hard-pressed to explain the following, based on the 2018
provincial stats:
Tax Rate Municipality
26.9 - Abbotsford
32.0 - Chilliwack
27.0 - Cache Creek
25.7 - Chase
131.65 - Colwood
59.0 - Gold River
87.0 - Lumby
7.0 - Whistler
7.38 - West Vancouver
These names should be familiar to most, and most will also
recognize that some of these represent very small rural communities, however,
according to one blogger, Whistler and West Vancouver are to be held up as
most desirable in the province with respect to property taxes, because they
have the lowest rates.
The blogger in question argues that
Abbotsford has the highest taxes, however, his argument on Tax Rate contradicts
his position. Simply put, “Tax Rate” is a multiplier – nothing more; nothing
less. Following the rationale of those who put Rate forward as a realistic
comparator, Lumby, Cache Creek, and Gold River taxpayers would be much worse off
than those from West Vancouver. Apart from the erroneous "Tax Rate" argument, the graph and table at the bottom quickly dispel the notion of Abbotsford's taxes being the highest.
The following graph and table are based on latest data provided by the provincial government, and clearly, Abbotsford does not have the highest taxes.The bar graph refers to cities over 35,000 population.
This table orders all our neighbouring municipalities, regardless of size, from highest to lowest in terms of "Total Property Taxes and Charges".
