Education tax rate takes bigger bite out of Nelsonite’s wallets
Education has a price.
City residents will be paying higher school taxes this year — almost 10 per cent higher — when the tax role comes due.
The province has decreed a 1.5 per cent increase to its school tax rate but did not account for the increases in assessed property values, meaning with residential assessments increasing on average of 8.3 per cent in Nelson there will be a 9.8 per cent increase in school taxes in 2018.
For an average single-family dwelling in Nelson that calculates out to an $82 annual increase in school taxes this year, said city chief financial officer Colin McClure in his report to city council Monday night.
“(T)he 2018 school tax rate that is set by the province … will have a significant impact on residential taxes,” said McClure in his report to city council.
However, there was a “substantial decrease” in the commercial school tax rate, dropping by 13 per cent.
“But that is partly offset by the average increase in commercial assessments this year of nine per cent, netting to an overall decrease of four per cent in the school tax rate for 2018,” said McClure.
On a $1 million assessed value commercial property that calculates to a $200 decrease from $4,200 from $4,400 in school taxes for 2018.
For the average residential home in Nelson, the municipal property taxes for 2018 are estimated to be $1,690. McClure said the city’s 2016-2020 Five-Year Financial Plan incorporates an average tax increase of 2.5 per cent for all property classes.
The total tax bill for Nelsonites will be over $4,000 per household this year — based on an assessment of the average Nelson home at $392,861 — with the city’s planned property tax, water and sewer increases.
Of the total tax amount, around 40 per cent will go to the City of Nelson, over $1,000 to water and sewer taxes, nearly one third to school taxes, almost 20 per cent to the regional district, three per cent to the regional hospital board and one per cent to the Municipal Finance Authority and the B.C. Assessment Authority.
Each year city council approves a five-year financial plan that establishes the annual budget and priorities. But a tax rates bylaw is also required in order to map out the collection of the appropriate funds to finance these activities.
The Tax Rates Bylaw supports all of the initiatives in the city’s Five Year Financial Plan and, therefore, supports all of the city’s corporate objectives, said McClure.
The 2018 tax rates are assessed at dollars of tax per $1,000 of taxable assessed value, meaning the figure BC Assessment has placed on the home or business.
There are nine property classes which the city recognizes tax rates for, but the main ones include residential and business.
For municipal taxes a “fixed share approach” to tax rates is taken between classes, said McClure, with the share of the total tax levy collected from each property class remaining consistent over time.
In 2018, nearly three quarters (73 per cent) of property tax will be contributed by residential taxpayers with one quarter (25 per cent) from the commercial sector.
Over the last 13 years the average single family dwelling residential assessment in Nelson has risen from $167,915 in 2005 to $392,861 in 2018, according to BC Assessment. Assessments peaked in 2018.
In five years — from 2004 to 2008 — assessments more than doubled in the city, hitting $312,112 in 2008 from $142,004 in 2004. Business assessments also doubled in 13 years, from $199,452 in 2005 to $440,551 in 2018.
Both residential and business classes have to pay eight different taxes, with the Tax Rates Bylaw also setting tax rates for general municipal (city), city debt, the Regional District of Central Kootenay (RDCK) and West Kootenay-Boundary Hospital (WKBH) levies.
Specified areas (FortisBC and Cominco) and the library service are also levied.
Other levies collected through the municipal tax notice include those for Central Kootenay Regional Hospital (CKRH), the school authority, BC Assessment, and the Municipal Finance Authority.
For residential taxpayers, they will be coughing up $4.1990 per $1,000 of taxable assessed home value for general municipal (city), $.0997 to the city debt, $.2763 to WKBH, $1.3775 to the RDCK, $4.2803 to specified area Fortis (RDCK), $.5799 to specified area Cominco (RDCK) and $.0859 to the library service.
The other city property classes include utility, supportive housing, light industrial, managed forest, recreational/non-profit and farm.
By the books
Section 197 of the Community Charter requires that council adopt, by bylaw, tax rates for the current year by May 15. This year City of Nelson taxes are due on July 3.
The City of Nelson charges a 10 per cent penalty on taxes paid after this date. The tax rates that are ready for adoption are based on the 2016-2020 Five-Year Financial Plan that was adopted on April 4, which incorporated an average municipal property taxation increase of 2.5 per cent.