If you are considering buying property in Vancouver, BC, you are likely wondering how much property tax you can expect to pay. And, if you have never bought property before, you are likely wondering what property tax is.

In this blog, we will explain what property taxes are, how Vancouver property tax rates are determined, and where your money is going. We will also compare property taxes in Vancouver and other cities to give you an idea of the cost of living in Vancouver, BC.

What Are Property Taxes?

Property tax is a municipal tax on owned land and property. Property owners must pay property taxes every year. The money collected from their annual property tax is used to fund community services like community centres, infrastructure, public transit, and other city services.

How Are Property Tax Rates Determined In Vancouver?

The City of Vancouver’s Spending Needs

Vancouver’s property tax rate is based on the budget needs of the municipal government. In other words, the City of Vancouver will assign a tax rate based on how much money they need to cover their expected spending.

To determine the tax rate, the government will look at their expected spending and their other revenue sources. If there is a disproportionate amount of spending vs. revenue, the municipal government will adjust the tax rate. Therefore, the home’s tax rate can increase or decrease yearly.

Your Property Value

Another factor that plays a part in determining your residential property tax is the market value of your property. Property tax rates can differ depending on the value of your land, its structures, and more. That is why people with larger, more expensive properties pay more home tax.

How The Assessed Value of Your Property Is Calculated

Before you pay property tax, your property will be assessed by the British Columbia (BC) Assessment. Thankfully, the BC Assessment team will never need to step onto your property; they have all the necessary information from documentation held by the Vancouver property tax system. You will simply receive a notice in the mail stating your property value.

A property assessment notice from BC Assessment will arrive in the mail before the tax season. The notice will provide the assessed value of your Vancouver property, its classification, and possible exemptions. The value of the property is based on several factors, including:

• The location of the property
• The age and condition of structures on the property
• The size and shape of the property
• The value of the property and structures according to the current real estate market
• How the property is used
• The size and shape of the land

The property’s taxable value will determine the property tax rates applied.

If you want to estimate your property tax bill before your tax notice arrives, use a Vancouver property tax calculator. Just make sure to input your property’s assessed value into the calculator to estimate your tax owed.

Vancouver Property Taxes Have The Lowest Rates In North America

Much to many people’s surprise, the Vancouver property tax rate is the most affordable rate across North America. The low home tax makes this exciting, multicultural city a more attractive place to live.

For example, in other cities like Toronto and Calgary, homeowners with properties valued at $500,000 will owe anywhere from $3,055 to $3,703 in tax. In comparison, property valued at $500,000 in Vancouver will have a taxable value of $1,460. Living in Vancouver can offer fantastic savings on property taxes.

In late 2021, the City of Vancouver passed a 6.35% increase to the property tax rate. Despite this large increase, Vancouver property tax will still have the lowest rate in North America. Homeowners can expect to pay an additional $14 per month compared to the previous year.

Another Property Tax To Consider: The Provincial School Tax

Property owners that own properties assessed at over $3 million will also need to pay the provincial school tax on top of their annual property taxes—no matter whether you or your family used the private or public school system or not.

The additional school tax is paid yearly alongside your Vancouver property tax. The money gathered from this tax is used to cover the fees associated with the education system. Currently, Canadian citizens and permanent residents need to pay:

• $2 in tax for every $1,000 of your property’s taxable value on properties valued at $3- to $4-million
• $4 in tax for every $1,000 of your property’s taxable value on properties valued at $4-million and over