How are School Taxes Calculated?

The total amount of taxes billed by the Municipality when it sends out its tax notice each year includes funds for other government groups as well as the funds required to operate the municipality. Contributions by property owners towards the cost of schools are included in the tax bill sent annually by the municipalities

There are nine classes and the provincial government decides upon the amount of the collected taxes that will be paid by each class on a proportionate basis.

The mill rate applied for "schools" in 2012/2013 was:

Class 2013rate/$100,0002012 rate/$100,000
01: ResidentialVaries according to school district.
02: Utilities14.0014.20
03: Supportive Housing0.010.01
04: Major Industry2.562.56
05: Light Industry4.322.56
06: Business6.206.40
08: Recreation/Non Profit3.403.40
09: Farm6.906.90

The residential provincial school tax rates for each school district are set so that rates are somewhat lower in school districts with higher average assessed residential values.

The monies are placed in the Province's Consolidated Revenue Fund and from that account school funding is provided. The funding is greater than the amount collected from property owners in the mill rate and the school district formula does not directly depend on property tax revenue.

In 2005, the provincial government indicated that the burden on property owners would only increase by CPI each year, plus the government would receive extra taxes from new construction.

This policy is reviewed annually, and made effective through the tax rate Orders in Council. The policy description is in the Tax Measures section of each Budget (Budget and Fiscal Plan, February 2013, page 55). http://www.bcbudget.gov.bc.ca/2013/bfp/2013_Budget_Fiscal_Plan.pdf

The mill rate has fallen most years as the increase in total assessed value is greater than CPI. As total assessments change, so mill rates will go up or down. If total assessments increase only due to new construction, rates would not change under this policy.

The Minister has not announced the policy for 2014. That will be in Budget 2014 in February. However, if it follows the same course as previous years, it will be:

Class 06

2013 amount collected × CPI × proportionate share of class (06)

Total assessed value of all property in class (06) in BC, less new construction / 1000

PLUS

the value of the new construction × the above mill rate for each class.

Those organizations paying Grants in lieu of taxes (Federal Government example) will pay in addition to this amount. What the Government of Canada chooses to pay in payments in lieu of taxes is separate from the provincial calculation of school property tax rates.

The most significant change for 2014 is the abolition of the school tax rebate for 05 class, which was reduced in 2013, resulting in a higher tax rate for 05 class. The announcement was made in Budget 2013, page 56.

Properties with 05 classification will receive an estimated increase of 7-15%, dependent upon the municipality (see attached chart on next page). Properties with mixed class will vary proportionately. The higher the mill rate, the lesser the % change. The adjusted

mill rate is calculated by adding all mill rates for each taxing jurisdiction plus school tax at the class 06 rate of 6.2.

Please call if you have any questions or if you would like us to estimate your 2014 taxes. 604 733 3282 www.austinrealeastateconsultants.ca

Austin Real Estate Consultants specializes in the review and appeal of property assessments, rental arbitrations and appraisals. Peter Austin formed the company in 2003 after having been a partner at Burgess Austin Cawley for 25 years, which he had founded in 1978 with Mr. Burgess.

Mr. Austin has been involved in the appeal process for over 35 years, and was the Chair of the BC Chapter of the Canadian Property Tax Association for 5 years up to 2011 and the Past President of the National Association. Consequently, Mr. Austin has developed an in-depth knowledge of the system and the associated legal cases that affect how properties are assessed, which number over 500. Mr. Austin has saved clients millions of dollars in taxes over the years.

SUMMARY

Class 05 and 06 Mill Rate Comparison

Based on 2013 Mill Rates, with class 06 school tax applied to class 05 adjusted and class 06

Jurisdiction

Class 05 Original

Class 05 Adjusted

% Change

Class 06

Class 06 +/- Class 05 Adjusted

Vancouver

14.9720

16.7207

12%

16.4854

-0.2353

Burnaby

15.9794

17.8594

12%

17.4770

-0.3824

Coquitlam

20.1176

21.9976

9%

21.7712

-0.2264

Delta (Annacis)

17.2965

19.1764

11%

18.7924

-0.3840

New Westminster

27.1037

28.9837

7%

21.0351

-7.9486

Port Coqutilam

20.0559

21.9359

9%

19.8802

-2.0557

Port Moody

25.1688

27.0488

7%

18.0594

-8.9894

North Vancouver (City)

15.1440

17.024

12%

16.6383

-0.3857

North Vancouver (District)

17.4363

19.3163

11%

16.6227

-2.6936

Richmond

14.6514

16.5314

13%

15.6439

-0.8874

Surrey

12.7760

14.6560

15%

15.0053

0.34928

Abbotsford

16.6309

18.5109

11%

20.1730

1.6621

Langley (City)

16.3195

18.1995

12%

16.8007

-1.399

Langley (Township)

16.4263

18.3064

11%

17.8451

-0.4613

Class 05 is light industry

Class 06 is business

In all cases above, except Surrey and Abbotsford, 06 is less than 05.

Mill rates for 2014 will change

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