Property taxes are set to rise three per cent after a majority of city councillors tentatively approved the City of Richmond’s 2017 operating budget.
Initially, director of finance Jerry Chong proposed a 3.5 per cent increase, but Mayor Malcolm Brodie suggested taking $1 million out of a $13 million rainy day fund that is open to council’s discretion, for one-time expenditures.
The tax hike is expected to impact owners of detached homes more than condo and townhouse owners, who will likely see a decrease in their overall tax bill due to some drastic changes in how property values will be assessed next year.
BC Assessment announced Tuesday that the value of detached homes in Richmond will be assessed 30-50 per cent greater than this year, while strata properties will go up 15-30 per cent, on average.
The higher assessments are to reflect the real-time sale prices of properties in the city. For instance, properties with older homes in West Richmond typically sell for at least $1.8 million, whereas they are typically assessed at around $1.2 million.
The total tax bill is dependent on the value of one’s home relative to other properties in the city. Ergo, if your property remains at the same value while other properties are assessed higher, your bill will be reduced, as the same mill rate is applied to (or multiplied by) assessed values.
“It is important to understand that large increases in property assessments do not automatically translate into a corresponding increase in property taxes,” said Assessor Jason Grant.
For instance, last year, most strata property owners in Richmond actually saw their tax bills decline. The changes have resulted in calls for the provincial government to increase the tax-reducing Homeowner Grant, which is applied on a sliding scale for homes valued at $1.3 million or less. The new assessments are expected to push the vast majority of detached home properties over this threshold.
Richmond’s tax increase is largely a result of municipal costs outstripping new tax growth (2.24 per cent to 1.36 per cent, respectively) plus additional policing costs (0.62 per cent).
The city has $38 million in the capital building reserves. It has $664 million in net assets, including $461 million in overall reserves.
Raking in $203 million in property taxes, Richmond has the fifth lowest property taxes (average per property) out of 21 Metro Vancouver municipalities.
At Monday’s finance committee meeting, Brodie was quick to curb any debate on an additional one per cent increase to bolster the city’s capital building reserves.
“We have a major facility program coming up and we need money and that’s where the one per cent comes from,” said Brodie.
Coun. Carol Day opposed the budget at committee level, citing lack of details in the committee’s 265-page report. The budget is expected to pass this Monday.