Budget: Robbing Main St. to Pay Howe St.?

Despite their past opposition to tax shifting, the governing Coalition of Progressive Electors and Vision Vancouver majority is expected to follow through on Mayor Gregor Robertson's election promise to continue the Non-Partisan Association's (NPA) 2008 tax shift plan.

For residential property owners, this means council will be asking them to take on a greater burden of taxes when the second of five tax shifts kicks in later this year.

In 2008, following the recommendations of a three-member property tax policy review commission, the governing NPA majority approved a process to redistribute $25 million in the amount of taxes paid by non-residential classes to residential property classes by shifting $5 million every year over five years. At the time, all five sitting COPE and Vision councillors opposed the shift. Only the two COPE councillors are expected to oppose the tax shift in this year's budget vote.

Between 2009 and 2013, the property tax shift will increase residential property taxes by two per cent each year and reduce non-residential property taxes (e.g., commercial/business and industrial) by two per cent a year. Under this redistribution plan the city will collect the same total dollar amount of property tax – it is simply a change in who pays a greater or lesser share.

The goal of this proposed tax shift is to reduce the share that non-residential properties currently pay, from 52 per cent to 48 per cent, by shifting the larger tax share to residential properties.

Currently, a residential property assessed at $700,000 is charged $1,353 per year in property tax. A business property of the same value pays $6,661 per year. As an example, over the five-year period a home valued at $700,000 will see a total $530 property tax increase, while a commercial property of the same value will see a cumulative $2,600 reduction. This tax shift provides a potentially needed tax break for smaller businesses in Vancouver but larger corporations and multinational across the city also receive the benefits of this tax shift onto residents.

What do you think about this tax shift? Do you agree or disagree with the city's policy to shift taxes from non-residential to residential properties.

Are you interested in other options to help reduce the tax burden on some businesses, such as ensuring small businesses are given a tax break, while larger businesses continue to pay the taxes they have in the past?

Fill out our Citizen Budget survey by March 27 and let us know what you think.