As the province of British Columbia is known for its beautiful landscape and a fast-growing population, it is important to know how much property tax you will need to pay to own a home in this area.Property taxes in BC are assessed by the province and collected by municipalities (cities and towns). In most cases, they are calculated as a percentage of the value of your home. The more expensive your home, the higher your property taxes will be—and vice versa. According to WOWA, the 2021 property tax value in BC ranged from $1,460 (0.29%) to $3,591 (0.72%).
How Are Property Tax Rates Determined in BC?
The provincial government sets out a formula for calculating property taxes. However, it's up to each municipality to determine how much they want to collect through those taxes, depending on the budget requirements.For properties above $3 million, an additional school tax is also levied. Here is what you are required to pay:
0.2% on property valued between $3 million and $4 million.
0.4% on property valued above $4 million.
Factors Impacting Your Property Tax Bill in BC
The property tax bill you receive is based on the assessed value of your property and a property tax rate set by the local government. Factors such as your property's location, size, and age can also affect your tax bill. Here is a breakdown of some of these factors:
The assessed value of a property is a measure of its fair market value for taxation purposes. The government assesses all residential and commercial properties in British Columbia on July 1st every year. The latest assessment review was completed in 2021. Assessed values are not set by individual owners or businesses; they're determined by BC Assessment Authority through an independent process.
Property Tax Rate
The City sets property tax rates each year based on how much money it needs to run its operations and fund major capital projects such as road repairs or improvements to parks and recreation facilities. Your property tax rate depends on the value of your home and other factors that may affect taxes including your assessment class (residential/non-residential), or allowable exemption amount (if any).
Exemptions can lower the amount of taxes you pay on your home by reducing its assessed value. Some properties are exempt from property tax because they are used for non-profit activities or are owned by certain types of organizations (e.g. religious institutions).
The larger your residential property, the higher its assessed value. Generally speaking, a two-story detached house will be valued more highly than a bungalow of similar age and condition. However, this isn't always the case. For example, some houses are built on larger lots than others (which could result in an inflated value).
Construction Type and Age
Older homes tend to have lower assessments than newer homes because they're typically less energy efficient and have smaller square footage per room than newer homes do. Because of this, older homes tend to pay less in taxes than newer ones do — unless they're located in an area where real estate values are high (in which case older properties will still pay higher taxes). Newer homes may also be eligible for certain exemptions or abatements that aren't available for old structures.
How Is Property Tax Calculated?
According to the BC Assessment Authority, property tax in BC is calculated using a formula that takes into account the value of your residential property and how much it increased or decreased over the previous year. This is called the assessed value of your property and is usually determined by an appraiser who visits your home to evaluate it based on its market value.Annual property taxes are then calculated by multiplying the assessed value of the property by the applicable tax rate, then adding any additional taxes and surcharges.To determine how much you'll pay in property taxes for a given year, find out what your property is valued at by visiting BC Assessment's website. Then plug that number into the formula above to find out how much you'll pay in taxes.
Property Transfer Tax
An additional property transfer tax applies to the purchase or sale of land in British Columbia. The tax rate depends on the purchase price, with lower rates applying to properties valued up to $200,000, and higher rates for higher valued properties.For more detailed information on this subject, refer to our recent blog 'property transfer taxes in BC)'.
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