The typical Victorian business will face a $262 increase in property taxes this year, while the average homeowner will have to shell out another $104 if the city council approves the new tax rates agreed at Thursday’s plenary meeting .
Councilors have voted to move forward with a tax rate option that aims to pass equal tax increases to all property classes, although major and light industrial classes will see their rates rise significantly. significant.
According to city staff, the industrial rate of 10.53 represents an increase of 9.71% for large industrial owners and 7.24% for light industrial owners. All other property categories will see a 3.85% tax increase this year.
“Over the past year, the City of Victoria has been careful to reduce the burden on businesses to help a local economy facing serious challenges due to the pandemic,” said Bruce Williams, Chief Executive of the Chamber of Commerce. of Greater Victoria.
“Many businesses still face challenges, so any tax increases will weigh on them at a time when we need our economy to take off. The Chamber is reaching out to our members to see how this affects them individually, and we will pass this information on to candidates in the fall municipal elections.
“The business community understands that taxes are a tool used by local governments to deliver services, but we are always alert to councils that attempt to shift costs onto business and industry and away from residents for political reasons. .
“Businesses need to plan their spending and they expect to be treated fairly. After all, the long-term health of our communities is directly linked to the health of our small businesses.
Last year, the city cut business taxes by just over 2% due to the pandemic and the fact that in 2020 the assessed value of commercial properties dropped an average of 5.29%. Residential property values in the city increased by 2.26% at the same time.
This year, property values have increased by an average of 15.85% for residential properties and 5.63% for the average business.
However, property assessments do not automatically translate into a corresponding change in property taxes. This is determined based on what an individual rating is compared to the average change in a property classification.
If a residential property has an increase of more than 15.85% in its taxable value, this property will suffer an above-average tax change and vice versa.
The council was split on tax rates on Thursday, with councilors Ben Isitt, Jeremy Loveday, Sarah Potts, Sharmarke Dubow and Marianne Alto voting for the new rate structure.
But Mayor Lisa Helps and councilors Geoff Young, Stephen Andrew and Charlayne Thornton-Joe have expressed concerns about the distortion between residential and industrial tax rates. Helps noted that this sends a harsh message to companies such as Point Hope Maritime, which employs a lot of people with well-paying jobs.
Young said the tax ratio distortion is a major problem not just for Victoria, but for the province as a whole. He suggested that the province will eventually step in to restore the balance.
“I think eventually the province will sort this out. They’re going to tell us, ‘You gotta get it back in order,’” Young said.
He suggested the tax ratio could return to a two-to-one ratio at some point – under the option the council chose on Thursday the ratio in Victoria would be 3.64-to-one – and he said the city should start heading in that lower ratio direction now.
“The recommendation on the parquet floor is the opposite. It increases that distortion,” he said.
Andrew said if the city continues to increase the tax burden on businesses and industrial property owners, it will scare off some of the big light industrial companies.