The average residential household in Sidney will pay about $22 more in combined taxes than last year, while the average commercial property will pay in excess of $2,660 more.
These figures appear in a report as council prepares to adopt the tax rate bylaw for 2021 after councillors had approved a budget that raises revenue from municipal property taxes by 2.7 per cent.
Andrew Hicik, Sidney’s director of corporate services, said this “fairly significant” increase paid by commercial property owners is largely due to the provincial decision to reinstate the school tax to its full level prior to the COVID-19 pandemic after having made a significant one-time cut to help commercial property owners.
“With the discontinuation of this one-time reduction, there is a ($2,613.92) increase in (school tax) for the average commercial property, which makes up the vast majority of the overall increase of ($2,663.43)” he said.
The average commercial property paid in $9,643.76 in total taxes in 2020, up 27.62 per cent this year to $12,307.19.
“It is important to note that the 10 per cent reduction in municipal business taxes – which was the (municipality’s) response to the financial impacts of the pandemic on our commercial tax base – was carried forward to 2021,” said Hicik.
Hicik added that Sidney’s federal-provincial re-start grant (which totaled more than $2.75 million) made this decision easier.
The report sheds light on the mechanics and politics of tax collection, as Sidney also collects annual taxes for other authorities without any direct say about their levels.
The report notes that municipal taxes typically make up half of the annual total tax bill before the application of the home owner grant. Sidney sets its own municipal tax rates, as well as the rates for the Capital Regional District, the Regional Hospital and Vancouver Island Regional Library based on their respective budgets and Sidney’s share.
“For the remaining jurisdictions (school taxes, regional transit, B.C. Assessment and Municipal Finance Authority), Sidney has no input on the amounts to be collected, nor on the tax rates that apply,” it reads.
Overall, the municipality has complete control over only one of the eight taxes collected on the property tax notice, limited control over three others and no control at all over four.
The report shows that the average residential property will pay $29 less to other governments in 2021 than in 2020. Sidney’s decision to raise more revenue through property taxes and the water parcel tax adds up to an additional $51 in leading to the combined increase of $22 dollars, or an increase of 0.65 per cent from last year’s total tax bill (before rebates through a provincial home owner grant).
The report also draws attention to the fact that residential properties account for less property tax revenue (73 per cent) than their total share of assessed properties (87 per cent) as non-residential properties pay taxes at higher rates. While a recommended review of different property class rates was put on hold until after the 2021 rates were set, staff said they are ready to resume the review at any time, should council see this initiative as a priority.
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