Quote:
Originally Posted by st7860
You don't live in BC or Vancouver right? Then explain why(in Vancouver) for people that plan to stay in their homes a long time it is said that those people do not want their property to increase in value because that will increase their annual tax bill?
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That's very simple.
First off, though, you can remove that "(in Vancouver)" parenthesis. People EVERYWHERE generally don't want their property to increase in
municipal evaluation if they can help it (while they of course would LOVE their property to increase in
market value, which isn't the same thing).
In 2006, and in 2009, and especially in 2012 when everything nearly doubled, every time the new assessments came in in Sherbrooke I have been negociating with the City to get them to lower the evaluations of a few of my buildings, arguing that honestly, I couldn't see them realistically selling for THAT high a price.
In most cases, they eventually agreed with me. In one case, they actually dug up fresh sales for the area and they convinced me with solid evidence that it was indeed worth that much nowadays. My reaction was something like "oh, well, then I can't argue. I'll pay a bit more in taxes, but on the other hand, I'm now richer -- on paper -- than I thought."
So, obviously, on an
individual property basis, given a tax rate
already fixed by the city, the lowest the valuation is, the less you'll pay in taxes.
If I have a $2 million Vancouver SFH, and I manage to convince the City of Vancouver that it has some catastrophic flaw that only makes it worth $200,000, on it, my taxes will be really low.
On the other hand, if all identical houses are now considered to be worth $200,000 city wide, then my taxes will be back up to what they were.
Essentially, what matters is which percentage of the City's total valuation your house represents. If everything doubles, but your house only increases by 50%, your taxes will now be lower (assuming of course the City budget doesn't explode, but in any case, your taxes will increase less than your neighbors whose houses doubled).
If everything goes down, but your house goes down less than average, your taxes will be higher.
All of that of course applies to the part that's based on valuation. In many cities, there are items that are on a per-resident basis (correlated with unit size), like trash removal for example. Those don't fluctuate along with assessed value.
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