Other Government Authorities Property Value Taxation
In addition to levying taxes for their own purposes, municipalities also levy taxes each year on behalf of other public authorities (board of education or hospitals). Municipalities levy and collect the taxes directly, then remit the revenue to the appropriate public authority.
Other Taxing Authorities
Government of British Columbia
- School Tax: School tax rates are set annually by order‐in‐council. A province‐wide rate is set for each non‐residential class including a nominal rate for the Supportive Housing Class (Class 3). The residential (Class 1) rate varies between school districts based on population and assessment base.
- Police Tax: Municipalities over 5,000 people pay for most of their police costs directly through their municipal taxes. In municipalities under 5,000 people, and in rural areas, the B.C. government sets tax rates to recover a portion of police costs. These tax rates are based on provincially set tax ratios.
The regional district will annually requisition a dollar amount from member municipalities for regional services that the municipality participates in. Regional districts set the taxing method for each service in the establishment bylaw and municipalities set the tax rates using that method to raise the necessary revenue.
In cooperation with regional health authorities, hospital districts determine the annual contributions from municipalities for health‐related capital costs. Hospital districts requisition amounts from each municipality who then set the tax rates based on provincial tax ratios to raise the necessary revenue.
BC Assessment is responsible for assessing all property values in B.C. The revenue required to cover operating and capital costs of BC Assessment is raised through a property value tax. BC Assessment levies a province‐wide tax through an annual bylaw.
Municipal Finance Authority
The Municipal Finance Authority is the local government banker and raises long‐term debt from the bond markets to finance municipal infrastructure. The revenue to cover operating and capital costs of the Municipal Finance Authority are raised through a property value tax. The Municipal Finance Authority levies a province‐wide tax through an annual bylaw. The tax rates are restricted by provincially set ratios.
Translink is the regional transportation authority in Metro Vancouver. Translink levies two distinct property value taxes, and the rates are only applicable to municipalities within Metro Vancouver.
- The first tax is for core operations and capital and is levied on all property classes. This tax is based on an initial historical bylaw set by Translink and sets different rates for each class. Subsequent increases to these historical tax rates cannot exceed provincial ratios.
- The second tax is a special replacement tax only levied on the following classes:
- Major Industry
- Light Industry
- Business Other
Victoria Regional Transit Commission
The Victoria Regional Transit Commission is governed under the British Columbia Transit Act and provides transit services within the Capital Regional District. The Victoria Regional Transit Commission sets tax rates based on provincially prescribed tax ratios, and are only applicable to municipalities within the Capital Regional District.
A tax ratio is the relationship between the tax rate of one property class compared to the tax rate for Class 1 (residential properties). For example, if a municipality's tax rate for Class 1 is $2 per 1,000, and for Class 6 (business and other) is $10 per 1,000, the ratio of Class 6 to Class 1 is 10:2 (or 5:1).
Municipalities generally have broad authority to set general municipal tax rates. Tax rates may not vary within a class of property, however tax rates may vary between different classes. When setting tax rates for other authorities, municipalities must set the tax rates based on provincial tax ratios set by the Municipal Tax Regulation except for regional district taxes. For regional district taxes, municipalities must set the tax rates based on one of two methods,using the:
- Provincial tax ratios set by the Municipal Tax Regulation
- Municipal ratios which are based on relationship between general municipal taxes for different classes of property in the current year
Regional districts determine which of these two taxing methods apply for each service in the establishment bylaw.
Provincial Tax Ratios
The current provincial tax ratios to the Class 1 rate are as follows:
- Class 1 (Residential) - 1.0 : 1
- Class 2 (Utilities) - 3.5 : 1
- Class 3 (Supportive Housing) - 1.0 : 1
- Class 4 (Major Industry) - 3.4 : 1
- Class 5 (Light Industry) - 3.4 : 1
- Class 6 (Business Other) - 2.45 : 1
- Class 7 (Managed Forest Land) - 3.0 : 1
- Class 8 (Recreation Property, Non-Profit Organization) - 1.0 : 1
- Class 9 (Farm) - 1.0 : 1