New Westminster's commercial property taxes are slightly higher than the regional average, but city hall believes that other factors compensate for the higher tax rate.
City council received an overview of the property tax burden and tax rates for non-residential property classes at its July 8 meeting. Although the city's business class tax rate ranks fifth out of 17 in the region and is slightly higher than the regional average, a staff report said that lower rents and lower property values help "offset" the higher tax rate.
"Typically rents tend to be lower in New West than in Burnaby or East Vancouver," said Randy Grant, the city's manager of collection services. "Having no bridges to cross was another advantage noted."
New Westminster is also attractive to businesses, said Grant, because of its proximity to Vancouver International Airport and the Surrey business community.
"Those were some of the significant advantages that New Westminster had to offer," he said of factors that compensate for higher property taxes.
According to the staff report, B.C. Assessment has nine classes of property: Class 1 - residential; Class 2 - utilities; Class 3 - supportive housing; Class 4 - major industry; Class 5 - light industry; Class 6 - business and other; Class 7 - managed forest (none in New Westminster); Class 8 - recreation/non-profit (places of worship etc.); and Class 9 - farm (one in New Westminster). The city currently gets about 60 per cent of its taxes from the residential property class and about 40 per cent from other classes.
The report states that business and industry representatives have complained since the early 1990s that they pay a disproportionate share of the property tax burden and have been advocating that the distribution of the tax burden be based on the "consumption" of tax-supported city services by each class. While no municipality has accepted the "consumption" arguments, the report noted some cities have agreed to gradually shift the tax burden from no-residential property classes to residential property classes.
"In conclusion, generally speaking, the city's non-residential tax rates and distribution of property tax burden are in line with other municipalities in the region, and although it may be prudent from time to time to adjust class tax rates and shift the tax burden between classes to remain competitive in the region, for now at least the primary property taxation policy should be to continue to set tax rates that are sufficient to fund city services, maintain capital assets and maintain tax stability," concluded the report.
According to the staff report, utilities and major industry tax rates are less than the regional average, light industry rates are "significantly higher" than the regional average (the city has committed to reducing this rate by 34 per cent over the next three years), and business class rates are about seven per cent above the regional average.
