STAFF REPORT - 2024 TAX RATES

RECOMMENDATION:

THAT the report dated April 29, 2024, from the Director of Finance titled “2024 Tax Rates” be received.

ALTERNATIVES:

Delaying adoption of the 2024 tax rates may create the need for additional Council meetings to meet the May 15, 2024, statutory deadline.

PURPOSE:

To provide information regarding the 2024 municipal, Capital Regional District and Capital Regional Hospital District tax rates as directed by the Committee of the Whole at its April 9, 2024, meeting.

TIME CRITICAL:

The Community Charter section 197 requires the municipality to adopt a tax rates bylaw after adoption of the financial plan but before May 15 each year. Tax Rates Bylaw No. 1133, 2024 has been prepared for first, second and third readings at the May 7, 2024, Council meeting and for adoption at the May 14, 2024, Special Council meeting to achieve compliance with legislation.

EXECUTIVE SUMMARY:

The proposed 2024 Tax Rates Bylaw No. 1133, 2024 reflects Council’s direction regarding the tax burden for the View Royal property owners based on the respective property assessment class as determined by BC Assessment. The average residential property valued at $1,060,908 in 2024 will see a $165 increase for municipal taxes and a $18 increase for Capital Regional District and Capital Regional Hospital District taxes. Once the bylaw is adopted, the annual property tax notice will be issued to property owners at least four weeks prior to the July 2, 2024, due date.

Tax rate increases for 2024 in other municipalities in the region are not yet available; however, View Royal’s municipal property taxes per capita ranked second lowest in the Capital Regional District in 2023.

BACKGROUND:

At its April 9, 2024, meeting, the Committee of the Whole considered several different options for tax rates that would achieve the 2024 revenue target identified in the five-year financial plan. Council directed staff to prepare a bylaw for the 2024 tax rates based on the tax ratios as described in Schedule 1 – Municipal Property Tax Rates and Ratios. Additional comparative information is provided on Schedule 2 - Summary of impact on prior year $100,000 property value and Schedule 3 – Sample property comparatives.

DISCUSSION:

The selected tax rate ratios (see Schedule 1 – Municipal property tax rates and ratios) reflect Council’s objectives to maintain a consistent tax burden for all property classes as described in the 2024-2028 Financial Plan bylaw (Bylaw 1132). Tax ratios for 2024 remain unchanged from 2023 except for the ratios for assessment Class 02 (Utilities) and Class 08 (Recreation/non-profit. The property tax rate for Class 02 is capped at $40, and Council directed the multiple for Class 08 to be increased to 6.5 (2023 – 6.0). This change and the addition of assessed values to the tax base through non-market changes (i.e., new construction) results in slight shifts in tax burden distribution toward the residential and the recreation/non-profit classes, away from the business and light industry classes, as shown below:

Schedule 2 – Summary of impact on prior year $100,000 property value shows that the impact to a residential single-family property is an estimated increase of $13 per $100,000 of 2023 assessed value (adjusted for 2024 market change), and $11 on a residential strata property by the same measure. The average residential property valued at $1,045,252 in 2023 is valued at $1,060,908 in 2024 and could expect to pay about $165 more for municipal property taxes this year. Schedule 3 – Sample property comparatives provides details on how the proposed tax rates affect selected sample properties.

The proposed 2024 tax rates bylaw includes rates for both the Capital Regional District (CRD) and Capital Regional Hospital District (CRHD), as required by legislation. The tax rates are calculated to collect sufficient revenue to pay the requisitions after adjusting for any prior year over or under levy. The adjusted 2024 CRD and CRHD requisitions are as follows, with comparisons to the prior year.

The average residential property valued at $1,060,908 in 2024 could expect to pay about $17 more for Capital Regional District taxes and about $1 more for Capital Regional Hospital District taxes in 2024.

Like View Royal, other municipalities in the Capital Regional District are in the process of finalizing their 2024 tax rates. View Royal’s municipal property taxes per capita ranked second lowest in the region in 2023.

Property owners will experience changes in tax amounts differently to the extent that the change in their property assessed value differs from the average change in total assessments for that property class.

Note that while information is provided for subsets of assessments within the residential class (single family, strata), legislation allows only one rate for the residential property class.

The proposed tax rates bylaw follows the legislated general property tax scheme, meaning that taxes are due on July 2, 2024, at midnight. The legislated penalty of 10% on all unpaid taxes, including unclaimed homeowner grants will be applied on any balance owing after this time.

SUSTAINABILITY/CLIMATE CHANGE IMPACTS:

The recommendation has no significant sustainability or climate change impacts.

FINANCIAL IMPLICATIONS:

Fifty-six percent of View Royal’s operating revenue comes from property taxes. The Community Charter and other legislation provides the framework for imposing and collecting property taxes. The annual tax rates bylaw is a key part of this process that results in raising sufficient revenue for the current year that, when combined with non-tax sources of revenue, fully funds the services and activities described in the five-year financial plan.

CONCLUSION:

The proposed 2024 Tax Rates bylaw reflects Council’s direction regarding the tax burden for the View Royal property owners based on the respective property assessment class as determined by BC Assessment. Primarily as a result of non-market change in the tax base, the property tax burden shifts slightly (0.54%) away from the business class to the residential, recreation/non-profit, and light industry classes.

The average residential property valued at $1,045,252 in 2023 is valued at $1,060,908 in 2024 and will see a $165 increase for municipal taxes and a $18 increase for Capital Regional District and Capital Regional Hospital District taxes. Once the bylaw is adopted, property tax notices will be issued to property owners at least four weeks prior to the July 2, 2024, due date.

CONCURRENCE:

REVIEWED BY:

ATTACHMENTS:

• Schedule 1: Municipal property tax rates and ratios
• Schedule 2: Summary of impact on prior year $100,000 property value
• Schedule 3: Sample property comparatives
• Tax Rates Bylaw No. 1133, 2024