Tax Rate Bylaw reveals real picture of tax assessment on Nelsonites
Nelsonites will be paying over five per cent more for their total tax take when compared to last year.
That is slightly higher than the four per cent increase assessed on the municipal tax rate alone, but not including the water, sewer and resource recovery increases, coupled with a jump in Nelson Hydro rates.
Each year council approves a Five-Year Financial Plan which establishes the annual budget and priorities, with a Tax Rate bylaw also required in order to collect an appropriate amount of funds — as determined by category — to finance its activities.
“The Tax Rate bylaw supports the initiatives in the city’s Five-Year Financial Plan and, therefore, supports the city’s corporate objectives,” said city chief financial officer Colin McClure in his presentation to council.
He said inflationary costs from every conceivable angle and source forced the city to prompt taxpayers to reach deeper.
“When we looked at was happening for 2022 and some of the cost pressures we were seeing, it became pretty clear that a four per cent tax increase was what was needed,” McClure said. “And, when you combine that for the four years for this council, they are still within that two per cent range annually.”
Earlier this year an increase to water and sanitary rates was approved by council to the tune of a combined 1.6 per cent — or an increase of $17 for a single-family home over 2021.
The annual rate for residential resource recovery rose from $75 per year to $100. It had been increased by $35 in 2020 to purchase the recycling blue bins for each home. For the second year in a row the additional money will be used for setting up for organics diversion.
For the average single family dwelling ($636,000, up from $504,000), the municipal property taxes for 2022 have jumped from $1,747 to $1,815, for a net change of $68. Water rates have risen on average (annual, after discount) by $7 to $379, while sewer rates have risen by $10 to $709 per year.
The total municipal tax take, including the resource recovery cost, will be $3,094 — up from $2,984 — on the average single family home, an extra $110 per year.
Tax rate bylaw
Section 197 of the Community Charter requires that council adopt, by bylaw, tax rates for the current year before May 15.
This year City of Nelson taxes are due at the end of the business day on July 4, with the City of Nelson charging a 10 per cent penalty on taxes paid after this date.
The financial plan for 2022 includes tax revenue of $9,845,475 for general municipal purposes with an estimated additional $480,000 in general tax revenue being provided by boundary expansion properties.
The Annual Tax Rate Bylaw provides the city with the authority to assess and collect the required tax funding.
Source: City of Nelson
The total picture
The tax rates are based on the 2022-2026 Five-Year Financial Plan, which required a four per cent increase in municipal taxation for 2022.
For the average residential home in Nelson, the municipal property taxes for 2022 are estimated to be $1,816 (or $151 per month).
Municipal taxes make up just under half of the taxes on a typical tax notice, McClure explained, while Regional District of Central Kootenay (RDCK), regional hospital, school and B.C. Assessment and Municipal Finance Authority taxes make up the other half.
“The City of Nelson Tax Rate Bylaw also includes tax rates for the regional district and regional hospital based on the requisitions received by these authorities,” said McClure.
The regional district taxes reflect a 3.6 per cent increase (up $161,021) in the requisition — which translates into $42 per year based on the average single family dwelling — while regional hospital taxes increased by 1.8 per cent (up $12,375), a bump of $5 on the average tax bill.
School tax rose by $48 per year — from $996 to $1,044 — for the year, while B.C. Assessment jumped $1.
With water, sewer and resource recovery added in, the tax take heads to $3,136 on the average single family dwelling.
A class apart
Council takes a “fixed share approach” to tax rates between classes, said McClure.
“(W)here the share of the total tax levy collected from each property class remains consistent over time, subject to adjustments arising from non-market (new construction) change in the assessment role and council decisions to adjust the share for each class,” he said.
This year, with adjustments made for new construction, 74 per cent of property tax will be contributed by residential taxpayers and 25 per cent from the commercial sector.