Why a lower home value might not save you when property taxes are due

You might see your property tax bill rise, even if the assessed value of your home slightly declined over the last year.

Last week, BC Assessment released its new annual property assessments. (Delays due to the postal strike mean homeowners may not receive their assessments until much later.)

You can find your assessment online here. You can view an interactive map showing the changes in property values across BC here. And you can find a map of the 500 residential properties with the highest value here.

Across the region, home values were relatively stable. The assessed values of residential properties in Harrison Hot Springs, Hope, and Mission rose the most, but across the region’s largest cities, home values didn’t budge all that much. 

The lack of movement in assessed home values coupled with projected property tax revenue increases in many municipalities mean that, in many places, a slight decline in assessed value may not be enough to stave off higher taxes come the summer.

Most homeowners understand that their individual property tax bills are directly tied to their home’s assessed value. But fewer recognize that the year-over-year change in their bill is mostly linked to how much their home’s value changes in relation to those in their surrounding municipality.

Across much of the region, municipalities are considering property tax revenue increases of between 5% and 10%. Abbotsford city staff have recommended a 6% hike, while Chilliwack is considering an increase of around 7%. In Mission, taxes were initially forecast to increase by up to 10%, but cutbacks to services have reduced that to about 7.5%. Other municipalities, including Langley Township, will be discussing their tax plans in the coming months.

But different homeowners will experience those increases differently. The tax increase is an average across the entire municipality and the increases relate not to the rate, but to the total amount of revenue each municipality plans to raise from property owners. How a citywide increase is applied to individual properties depends on how each home was assessed in relation to others in the municipality.

In years when home prices sharply increase, properties with relatively modest increase in value might actually be taxed less than the year before—even as the local municipal government broadly increased taxes. On the other hand, properties with values that outpace others in their community can face even higher property tax increases than the approved revenue bump might suggest.

This has been the case for many Fraser Valley homeowners in the last decade, when housing prices and home values skyrocketed across the region. The last two years, though, have seen property values hold steady or even decline in some areas. But inflation and, especially, new contracts for police, firefighters, and city staff, mean municipalities across BC have been raising taxes to keep up with the rising costs. 

This year, many property owners will be facing higher tax bills, even as their home values stagnate or, in some cases, decrease

Long-time homeowners have some consolation, however. Believe it or not, the tax mill rate (i.e. how much tax you pay for every $1,000 of home value) is actually much lower than it was a decade ago. That’s because of the last decade’s dramatic rise in property values, and because cities set their total tax requisition first and use that to determine the yearly mill rates 

In Abbotsford, for instance, homeowners paid $2.56 per $1,000 of home value last year. A decade prior, they paid $5.17. All BC tax rates have moved in the same direction because the prices of homes vastly outstripped inflation and other causes of municipal tax increases. 

(Spreadsheets of annual tax rates for each municipalities can be found here.)