2026 TAX MULTIPLES AND RATES

2026 TAX MULTIPLES AND RATES

RECOMMENDATION:

THAT the Committee recommend to Council that staff prepare the Tax Rates Bylaw to implement the 2026 general municipal tax rates to reflect a uniform tax increase across all tax classes, per Financial Plan policy.

ALTERNATIVE OPTIONS:

Option #2: THAT the Committee recommend to Council that staff prepare the Tax Rates Bylaw to implement the 2026 general municipal tax rates as per staff recommendation except for decreasing burden to class 6/increasing burden to Class 1 by reducing the class 6 multiple to 4.2

Option #3: THAT the Committee recommend to Council that staff prepare the Tax Rates Bylaw to implement the 2026 general municipal tax rates as per staff recommendation except for increasing burden to class 6/decreasing burden to Class 1 by increasing the class 6 multiple to 4.4

PURPOSE:

To confirm the property class tax multiples and associated rates for 2026 that will achieve the adopted Financial Plan’s revenue target for municipal taxation.

TIME CRITICAL:

The Community Charter requires municipalities to adopt a tax rates bylaw after adoption of the financial plan bylaw and before May 15 each year. After receiving direction from Council, staff will prepare the tax rates bylaw for 2026 which would impose taxes required as envisioned in the Town’s Financial Plan.

BACKGROUND:

The Town’s current tax rate setting language is embedded in the annual Financial Plan Bylaw as follows,

Objectives:

1. To ensure property value taxes remain affordable and reasonable for services provided.
2. To maintain consistent tax burden for all property classes.

Policies:

1. Regularly review the affordability of property value taxes for each property class relative to other classes.
2. Regularly review and compare the Town of View Royal’s distributions of tax burden relative to other municipalities in the region and historically.

Objective 2 is achieved by the Town affecting uniform taxation increase across all classes. Primary property taxation principals include fairness, predictability, and consistency. Allowing the property class tax rates to absorb changes in assessed values is best practice and provides fairness, predictability, and consistency. Council’s objectives may shift over time such that reviewing and changing tax multiples to achieve those objectives on a regular basis deteriorates these principals.

A best practice for tax rates practices or policy is for Council to review taxes early in the year following an election year, to set tax rates practice and/or policy for the four-year term.

DISCUSSION:

The Town’s Financial Plan envisions a total property tax increase of approximately $1.4M which requires an 8.15% tax revenue increase. This is approximately $193 to the representative Class 1 property carrying an assessment of $1,084,719 (2025 -$1,071,133). The Class 6 multiple is relatively consistent with prior years at 4.32 (2025 – 4.30, 2024 – 4.30)

Using the multiple to measure tax burden shift is most effective where assessment changes are stable. In a situation where the residential assessed values have gone up substantially, the tax rate must go down to maintain the same burden. Meaning the ratio will have gone up, when the burden hasn’t changed.

An alternative is picking a $ value to reduce the class burden by rather than targeting the multiple. In 2026, the difference in assessment changes was approximately 2% so focusing on multiples is appropriate but not the only indicator of burden.

As the assessments from Class 1 and Class 6 combine for 99.7% of total general taxable assessments (Class 1 – 91.8%; Class 6 – 7.9%), staff have included in this report two options to adjust the business class ratio relative to the residential class.

Staff recommendation

To maintain a consistent tax burden, a uniform tax increase of 8.15% across all classes is recommended. The approximate impact on representative properties within each class is as follows:

Option #2

Lowering the multiple for Class 6 Business, relative to Class 1 Residential from 4.32 to 4.2, increases the rise in property taxes of the representative Class 1 property by approximately $20 to $213, while reducing the rise in property taxes of the representative Class 6 property by approximately ($636) to $1,618.

Option #3

Increasing the multiple for Class 6 Business, relative to Class 1 Residential from 4.32 to 4.4, lowers the rise in property taxes of the representative Class 1 property by ($12) to $181 while increasing the rise in property taxes of the representative Class 6 property by $399 to $2,653.

Comparators

Appendices A, B and C provide 2025 tax multiples, tax rates, and municipal taxes on an average home for Capital Regional District municipalities for information. Summarized results are in Tables 1 & 2.

• Tax multiples and municipal taxes on an average home - somewhat comparable municipality to municipality. They vary however due to several factors including municipal services offered, municipality size and property class inventory make up, age, asset management strategies and Council discretion
• Tax Rates are least comparable due to differences in average assessment values, municipality size and services offered, and property class inventory differences by municipality

The main factors under Council discretion are the amount of taxation and how it is distributed equitably across the community through tax rates, property class multiples, and permissive tax exemptions. Please see Appendix D for British Columbia general property taxation information and history.

Table 1. 2025 Town of View Royal assessment base, gross taxes, and multiples

Table 2. Property Tax multiples for Town of View Royal, and CRD regional municipalities high, low, and median comparisons. Source: https://www2.gov.bc.ca/gov/content/governments/local-governments/facts-framework/statistics/tax-rates-tax-burden

Reviewing tax rates, multiples, and setting a practice

As above, staff are recommending against the annual review of tax multiples and moving to a less-frequent review cycle aligned with election terms to ensure taxation principals of fairness, predictability, and consistency are maintained.

Staff are also recommending against the review of specific properties and tax impact in any specific year. The tax impact to specific properties can vary greatly depending on,

• Assessed value in comparison to the average home
• Assessed value change from the prior to current year in comparison to the average home increase or decrease

This practice could also be viewed as prejudicial to the properties being reviewed.

Tax practice or policy setting is best determined by the following factors:

• Council’s direction on the utilization of municipal services between different property classes (multiples). Specifically for Class 1 residential compared to Class 6 business/other and Class 8 recreation/non-profit which combined make up 99.9% of the Town’s assessment base. Note, there is no quantifiable evidence for such decisions, this is at Council's discretion.
• Comparison to other municipalities in the Capital Regional District
• Comparison to other BC municipalities with similar size, property class inventory, and services offered as the Town
• Local economic conditions
• Community feedback on services offered and facilities
• Need for stability and predictability of taxation

PUBLIC PARTICIPATION GOAL:

The desired level of public participation for the recommended option is:

☐ Inform ☐ Consult ☐ Involve ☐ Collaborate ☐ Empower ☒ N/A

ATTACHMENTS:

Appendix A: 2025 Tax Multiples for CRD Municipalities Appendix B: 2025 Tax Rates for CRD Municipalities Appendix C: Municipal Taxes on an Average Home - 2025 Appendix D: Property Taxation 101 For Information