Better late, than never

 

In the first six months of this year alone, commercial real estate in the city assessed at $32 million was purchased with the intention of housing homeless and street people living in tent encampments. It represents a property tax loss of about $335,000 annually – or about $3.35 million every 10 years – likely for the foreseeable future.

“The supportive and affordable housing file has largely been neglected by governments for a generation. So, the city and province is to be commended for finally addressing the issue,” says Stan Bartlett, chair of Grumpy Taxpayer$ of Greater Victoria.

“But, by delaying action, the solution has increased and now comes at a sizeable cost in foregone property taxes.”

There are strict rules around supportive housing, but if applicable, this means that the property’s assessed value will be reduced to $2 ($1 for the land and $1 for the improvements). This means that the taxes owing will be essentially $0.

The property tax status (i.e. taxable or exempt) is typically determined based on who the lessee/operator of a property is. However, the above rules around class 3 supportive housing remain, so even if technically “taxable” because the operator is a taxable entity, the supportive housing classification reduces the taxes owing to essentially $0, according to the city.

The most recent purchases with corresponding loss of property tax using just the city portion of the overall mill rate of 13.8238 include:  

• April 2020  – 930 Pandora – Lot purchased by the City for affordable housing – BC Assessment valuation $8,111,300 – @ tax rate of 10.3581 taxes payable would be $84,017 (2020).

• April 2020  –  926 Pandora – Lot purchased by the City for affordable housing – BC Assessment valuation $1,393,000 – @ tax rate of 10.3581 taxes payable would be $14,428 (2020).

• May 2020 – Comfort Inn, 3020 Blanshard – Purchased by BC – BC Assessment valuation $14,175,000 @ 10.3581 taxes payable would be $146,826 (2020).

• May 2020 – Paul’s Motor Inn, 1900 Douglas – Purchased by BC – BC Assessment valuation $8,757,000 @ 10.3581 taxes payable would be $90,707 (2020).

In addition, the city collects a tax demand from businesses for school boards, hospitals, the CRD, among others, and they will also suffer a loss of revenue.  

 

City of Victoria, 2020 Tax Rates.  

City of Victoria, Permissive Tax Exemptions Policy (Evaluation Category 1, Special Needs and Supportive Housing). 

 

 

Stan Bartlett, Chair, Grumpy Taxpayer$ 

grumpytaxpayers@telus.net  

250-477-9907