The average Victoria homeowner will see a municipal property tax increase close to four per cent — about $83 — this year as Victoria council tries to ease the tax burden on downtown businesses.
“It is a difficult balance between wanting to keep businesses in town and provide for an environment that allows for the creation of wealth and employment, recognizing that those are the businesses that people want to have,” Mayor Dean Fortin said.
“It is still tough for businesses. If you meet with any of them, they are scraping by and hanging in there.”
While the overall property tax increase is 3.25 per cent, the council is sticking to its policy made last year, when it decided to shift the tax load over a three-year period reducing the commercial share of the total tax levy to 48 per cent.
The redistribution means the tax hike on the average residential property (assessed at $518,000) will be 3.96 per cent or about $83. The increase for the average business class property (assessed at $1,437,000) will be 2.55 per cent or about $480.
Coun. Pam Madoff said it has to be remembered that taxes are only one factor in a business’s decision to stay or move out of the downtown. She said she knows of one long-time downtown business that is facing a 30 per cent increase in rent.
“We play one role in all of this. There are many other factors that determine whether or not a business is successful,” Madoff said.
“It may seem somewhat simplistic, but the less discretionary income that a resident has, the less the opportunity they have to support local business in a discretionary way as well. That’s something that’s always been on our radar.”
Meanwhile, councillors decided against reducing the 10 per cent penalty property owners face for late payment of taxes. Under the current system, the penalty is applied to taxes paid late (July 2 or the first business day thereafter).
The majority of municipalities on the Lower Mainland operate under an alternate tax scheme and have two penalty dates of five per cent each.
According to a city staff report, 92 per cent of property owners pay their property taxes on time and moving to two penalty dates would be costly.
For example, moving to a five per cent penalty in July and a five per cent penalty in September would mean a net revenue loss of about $217,000.
