An interesting roadblock developed when we asked the town of Port McNeill to share what its tax bill would be this year on a $500,000 home.
The town’s treasurer didn’t really want to give it to us.
“Frankly, I am not sure whether the Town of Port McNeill has a $500,000 house in its residential housing inventory. You can get a nice house on the beach for about $450,000,” Dan Rodin said.
His counterparts in Oak Bay also may have been a little baffled by the question.
A $500,000 home? In Oak Bay? What do you want next, the going rate on slightly used unicorns?
With your residential tax bill slated to come due July 3, most Island homeowners are going to be curious about how their hit compares to that of their neighbours.
But, as most city councillors busy prepping their campaign signs would be quick to tell you, one Vancouver community is not like the other. And trying to make an apples-to-apples comparison on their tax bills isn’t exactly easy.
But we did it, and here are the highlights:
- The gold star for the lowest average tax bill on Vancouver Island in 2018 goes to Port McNeill at $2,154.
- The golden raspberry for the highest average tax bill on Vancouver Island in 2018 goes to Oak Bay at $6,015
- Oak Bay also was home to the Island’s largest percentage leap in residential taxes this year, at 4.65 per cent.
- North Saanich (at 1.36 per cent) narrowly edged Colwood (1.38 per cent) for the smallest residential tax increase this year
- The highest “mill rate” on the Island is in Port Alberni where a $500,000 home faces a tax bill of $3,885.
- And the lowest mill rate — signifying the cheapest municipality to run per $500,000 in assessment value — was North Saanich (by a huge margin) at $719.
Before the people of Port Alberni pick up pitchforks and torches (while the good folks of North Saanich snicker and point) consider this context: generally speaking, the lower the average home assessment is in a community, the higher the mill rate is going to be; also, the more services offered in a community, the higher the taxes are going to be.
“Keep in mind that it is very difficult to compare assessed values and taxes (especially just the municipal portion) with other communities as the services and infrastructure varies from community to community,” said Erin Anderson, chief financial officer for the Town of Ladysmith.
Ultimately, it’s up to the individual homeowner to decide whether he or she is getting value for their money, but we have tried to provide some context by comparing 28 different Vancouver Island municipalities in three different ways:
1) this year’s residential tax increase as a percentage
2) this year’s total tax bill for an average home assessment in that community
3) municipal taxes owed on a $500,000 home, not including taxes collected on behalf of other agencies
(All figures were supplied by the municipalities themselves)
Percentage Increase
On the surface this seems like a straightforward question: How much did they jack up my rate, and how does that compare to everybody else?
The answer is that most Island communities are playing in the same ballpark; Eighteen of the 28 communities surveyed report tax hikes this year of about 2 or 3 per cent. Even the biggest spenders kept their hikes to 4 per cent (Victoria, Parksville, Port Hardy, Ucluelet), or (in the case of Oak Bay) 4.65 per cent.
A cynic might say councils were being especially attentive to their bottom line because this is an election year. A realist understands every municipality’s spending decisions this year are going to be affected by decisions made last year, or decisions that will have to be made next year.
Oak Bay Coun. Kevin Murdoch said taxes in Oak Bay are higher this year because the municipality kept them unrealistically low previously.
“Last year taxes were made artificially low by shifting funds from reserves and underfunding capital projects. It was the reason I couldn’t support that budget,” he said. “This year, we are paying for it, but it is a relief to see council at least recognize we will have to address the infrastructure shortfall.”
Meanwhile, Duncan Coun. Roger Bruce said that city’s actual tax hike would have been above 4 per cent this year if council hadn’t decided to take $54,276 from a reserve fund set aside for future city policing.
“I’ve always supported lowering taxes and have worked hard at that for the last three years that I’ve been on council,” Bruce said. “I find it odd that with a vote on amalgamation with North Cowichan coming up in a few months, we’d take a chunk of money from our reserves so that we could keep our tax increase for 2018 under three per cent. I haven’t seen anything like it on my three years on council.”
Another thing to remember is that the individual homeowner’s percentage increase may be significantly different than the town’s. The individual homeowner’s cost is affected by how the value of his or her home changed relative to other assessments in the community.
Total taxes
When it comes right down to it, most people just want to know what they have to pay.
When it comes right down to it, living in the city usually costs more and taxes are no exception.
Despite having some of largest tax bases on the Island to draw from, the core municipalities of Greater Victoria also have some of the largest tax bills — in some cases by a wide margin. Oak Bay ($6,015), Saanich ($4,277) Esquimalt ($3,962) Victoria ($3,866) and Central Saanich ($3,773) have the Island’s five biggest tax bills for a residential home. Everywhere else ranges from between $2,154 (Port McNeill) to $3,591 (Qualicum Beach).
Apparently, the most densely populated part of the Island demands its greatest level of service and infrastructure — more people, more services, more maintenance. But you’ll also see a general correlation between the communities with the highest total tax bills and the communities with the most expensive homes.
So one could argue it’s not just about what services as community may need, but also what it is willing to pay.
“We have done our best to get down to a number where we can go out to the public and justify it,” said Saanich Coun. Colin Plant. “While it is greater than the Consumer Price Index, this is what it takes to have our community.”
Councils are also able to subsidize the residential tax base through industrial and commercial taxes. Langford has aggressively pursued that kind of development over the past 20 years and used it to improve community amenities while keeping the residential tax rates relatively low. North Cowichan’s residential tax rates have crept up over the past decade or two because councils have determined the community had become overly dependent on the huge taxes paid by the Crofton pulp mill.
Many communities alternate between jacking up commercial taxes to ease the immediate burden on the homeowner, and cutting them back to encourage building the tax base through more commercial development.
“I think that we did fairly well with 2.9. [per cent overall],” Esquimalt Mayor Barb Desjardins said. “I’m always conscious of increasing any kind of taxes because of course having come from owning a small business, I understand the implication of when you increase a residential rate by 2.9 [per cent], the reflection back to a business is that much more.”
Municipal mill rate
But in addition to raw numbers, there is also such a thing as bang for your buck — what exactly does your community cost you on a dollar-for-dollar basis?
For an apples to apples comparison, we decided to compare the tax bill for a $500,000 home in each community.
And that’s where things really got complicated.
First of all, consider that a large chunk of your tax bill is not decided by your town council. Rather, it is collected by them on behalf of other agencies like regional districts and hospital districts.
“We have little control over the amount of tax dollars provided by Ladysmith taxpayers to the other agencies that serve our community,” said Ladysmith Mayor Aaron Stone.
So we limited our comparison to only those taxes collected by the municipality for the municipality.
Keep in mind as well the differences between communities and the services they demand. For example, North Saanich is a relatively rural district with no sidewalks, few streetlights and many properties on septic tanks, where homeowners have to contract their own garbage pickup. Port Alberni is a city that provides thoroughly urban services.
Finally, assessments matter because they automatically stack the deck on fixed cost projects — the higher the assessment, the lower the mill rate.
“Our average assessments are higher, so our average assessment is say, $500,000,” Qualicum Beach finance director John Marsh said. “In Parksville, it’s more like $400,000, but because we have higher assessments we’re able to have a lower tax rate to generate the same dollars.”
Consider again North Saanich and Port Alberni. A sidewalk cost the same to build in each community, but Port Alberni will have to reach deeper into an average homeowner’s pocket to pay for it, because North Saanich has deeper pockets.
So when you see North Saanich and Port Alberni on opposite extremes of the mill rate chart, it is more a function of North Saanich having fewer responsibilities and a larger trust fund than it is Port Alberni being irresponsible.
Ultimately, tax rates are an ongoing balancing act between what people want and what people are willing to pay that varies based on the means and the priorities of each community.
“You can’t hold taxes at zero in a rising environment of costs, expenses and expectations,” Sooke Mayor Maja Tait said. “You will just fall behind or things just won’t get done.”
— with files from Black Press Vancouver Island
Average Assessment
By Community
CAMPBELL RIVER
Residential tax increase 2.1 %
Municipal taxes on a $500,000 property $2,417
Average residential assessment $356,000
Total taxes on an average home $3,288
CENTRAL SAANICH
Residential tax increase 2.97%
Municipal taxes on a $500,000 property $1,431
Average residential assessment $697,000
Total taxes on an average home $3,773
COLWOOD
Residential tax increase 1.38%
Municipal taxes on a $500,000 property $1,519
Average residential assessment $596,395
Total taxes on an average home $3,269
COMOX
Residential tax increase 2.43%
Municipal taxes on a $500,000 property $1,314
Average residential assessment $464,457
Total taxes on an average home $2,835
COURTENAY
Residential tax increase 2.83%
Municipal taxes on a $500,000 property $1,718
Average residential assessment $374,000
Total taxes on an average home $3,125
CUMBERLAND
Residential tax increase 2.92%
Municipal taxes on a $500,000 property $1,804
Average residential assessment $357,557
Total taxes on an average home $2,863
DUNCAN
Residential tax increase 2.78%
Municipal taxes on a $500,000 property $2,028
Average residential assessment $316,788
Total taxes on an average home $2,599
ESQUIMALT
Residential tax increase 3.70%
Municipal taxes on a $500,000 property $1,849
Average residential assessment $663,552
Total taxes on an average home $3,962
LADYSMITH
Residential tax increase 2.07%
Municipal taxes on a $500,000 property $2,056
Average residential assessment $373,500
Total taxes on an average home $2,749
LAKE COWICHAN
Residential tax increase 2%
Municipal taxes on a $500,000 property $1,943
Average residential assessment $269,071
Total taxes on an average home $2,571
LANGFORD
Residential tax increase 2.45%
Municipal taxes on a $500,000 property $1,231
Average residential assessment $491,450
Total taxes on an average home $2,447
NANAIMO
Residential tax increase 2.08%
Municipal taxes on a $500,000 property $2,144
Average residential assessment $463,849
Total taxes on an average home $3,376
NORTH COWICHAN
Residential tax increase 2.57%
Municipal taxes on a $500,000 property $2,017
Average residential assessment $390,419
Total taxes on an average home (Chemainus/Crofton) $2,820
Total taxes on an average home (South End) $3,051
NORTH SAANICH
Residential tax increase 1.36%
Municipal taxes on a $500,000 property $719
Average residential assessment $876,000
Total taxes on an average home $3,065
OAK BAY
Residential tax increase 4.65%
Municipal taxes on a $500,000 property $1,237
Average residential assessment $1,333,268
Total taxes on an average home $6,015
PARKSVILLE
Residential tax increase 4%
Municipal taxes on a $500,000 property $1,804
Average residential assessment $401,101
Total taxes on an average home $2,855
PORT ALBERNI
Residential tax increase 3%
Municipal taxes on a $500,000 property $3,885
Average residential assessment $247,138
Total taxes on an average home $2,624
PORT HARDY
Residential tax increase 4%
Municipal taxes on a $500,000 property $963
Average residential assessment $165,595
Total taxes on an average home $2,908
PORT McNEILL*
Residential tax increase 2.7%
Municipal taxes on a $500,000 property $2,876
Average residential assessment $188,461
Total taxes on an average home $2,154
QUALICUM BEACH
Residential tax increase 3.5%
Municipal taxes on a $500,000 property $1,483
Average residential assessment $540,000
Total taxes on an average home $3,591
SAANICH
Residential tax increase 3.07%
Municipal taxes on a $500,000 property $1,476
Average residential assessment $878,400
Total taxes on an average home $4,277
SIDNEY
Residential tax increase 2.43%
Municipal taxes on a $500,000 property $1,163
Average residential assessment $617,906
Total taxes on an average home $2,882
SOOKE
Residential tax increase 2.79%
Municipal taxes on a $500,000 property $1,369
Average residential assessment $441,372
Total taxes on an average home $2,505
TOFINO
Residential tax increase 2.15%
Municipal taxes on a $500,000 property $1,519
Average residential assessment $626,615
Total taxes on an average home $2,597
UCLUELET
Residential tax increase 4%
Municipal taxes on a $500,000 property $2,195
Average residential assessment $308,951
Total taxes on an average home $2,362
VICTORIA
Residential tax increase 4%
Municipal taxes on a $500,000 property $1,644
Average residential assessment $743,000
Total taxes on an average home $3,866
VIEW ROYAL
Residential tax increase 2.28%
Municipal taxes on a $500,000 property $1,191
Average residential assessment $644,712
Total taxes on an average home $3,014
*The Port McNeill assessment is an estimate based on a 2% increase from last year. The official assessment was unavailable.
