A progressive tax uses a lower tax rate on people who have less and a higher rate on those who have more. But right now, Vancouver is not allowed to tax mansions at a different rate than other residential properties.
Through this campaign, we are asking the City and the Province to work together to change the Vancouver Charter – legislation that outlines what Vancouver has power over – so that the City has the ability to levy a progressive property tax on its portion of property taxes.
City Councillor Jean Swanson will be bringing a motion to Vancouver City Council in the spring of 2022, asking City staff to research the financial and legal structure of a municipal progressive property tax, and to provide options for the most effective way that such a tax could help to end homelessness.
Draft Motion as of February 3, 2022
- A progressive tax imposes a lower tax rate on people who are less able to pay and a higher rate on those who are most able to pay; and
- British Columbia’s provincial income tax is progressive: designated by income bracket, a lower tax rate applies to lower income levels, and a higher tax rate to those with a higher income; and
- Canada’s federal income tax is progressive, as it is determined by income bracket, with lower income-earners paying a smaller percentage of their earnings than higher income earners; and
- British Columbia introduced an additional school tax in 2018 that is a progressive property tax. Properties valued under $3 million do not pay this tax; valuations between $3 million and $4 million pay 0.2% tax and those valued at $4 million and above pay a 0.4% tax; and
- Vancouver’s city property tax is currently regressive, as it imposes the same rate on all properties regardless of the assessed value, or the amount of the owners’ wealth; and
- Vancouver needs additional funds to provide public services, combat climate change, reduce homelessness and support affordable housing; and
- A recent staff report to Vancouver City Council itemized over $300M in costs downloaded on the city by provincial and federal governments https://vancouver.ca/files/cov/12-03-2021-council-memo-city-funds-allocated-to-downloaded-services.pdf; and
- The 2016 Statistics Canada Financial Security Survey shows that share of land wealth and total net worth in BC increase together, with the richest households holding by far the most land wealth and the poorest households holding the least. Progressive property taxation, rather than a flat rate taxation, would reduce wealth inequality https://www.policynote.ca/land-wealth-is-a-massive-source-of-inequality-in-bc/; and
- Provincial programs offset property taxes that can cause financial hardship for those who can’t afford to pay. These include grants of $570 to Vancouver homeowners whose properties are valued less than an annually-determined threshold. An additional discount of $275 can be granted for property owners who are seniors, veterans, persons with a disability, persons living with a spouse or relative with a disability and for the spouse or relative of a deceased owner. https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/home-owner-grant/senior; and
- An additional low income grant supplement can be provided for seniors earning less than $32,000 a year https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/home-owner-grant/senior/low-income; and
- B.C. homeowners who are 55 years or older, a surviving spouse, or eligible persons with disabilities can also apply to defer their property taxes. Deferment is also available for homeowners who financially support a dependent child. https://news.gov.bc.ca/releases/2018FIN0023-000951 ; and
- Extra money from a progressive tax could be used to build housing and reduce homelessness; and
- For example, if there were an additional surtax of 1% on the value of residential properties over $5 million and 2% on the value over $10 million, the City could have collected approximately $225,000,000 from 4,806 properties in 2021; Modular housing costs approximately $300,000-$500,000 per 320 square foot unit which would mean 750-450 new homes could be built per year.
THEREFORE BE IT RESOLVED
- That City Council requests the Mayor on behalf of Council to urge the province to change the Vancouver Charter to give the city the power to levy a progressive property tax.
- That City staff investigate options for the legal and financial structure of a Vancouver progressive property tax and how it could help to end homelessness, and report back by Q4 2022.
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