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Split among council candidates on shifting business taxes to residential

October 29th, 2008 · 2 Comments

Sharper eyes than mine have noted that in the Vancouver Sun survey of council candidates, two of the seven Non-Partisan Association candidates who answered the question said they did not support shifting more of the business share of tax to residential.

Michael Geller, a development consultant and expert on how real-estate economics work, is not in favour, nor is Sean Bickerton, a new NPA candidate who lives in Tinseltown.

Michael, who has steadfastly put out thoughtful positions on the issues even when they are not in line with party policy, had this to say on the issue:

The question of the fair determination and allocation of property taxes is much more complex than can be answered yes or no.  For instance, I personally think we should be considering revisions to the residential classification to distinguish between low density single family housing and higher density housing which places less demands on city services.

similarly, by always taxing a property based on its highest and best use, regardless of its actual use, can also be very unfair. One of the reasons we are losing gas stations in the city is because the property taxes are often based on the value of the site as a 20 storey apartment building, not as a gas station.

Now I definitely do not support the suggestion made by one candidate that perhaps the taxes should be based on how well a business is doing. But I am the first to admit that over time, there is room for more adjustment to create a more equitable system. I am the first to admit I need to learn more about this issue.

My yes or no answer to the question was in large part a reflection of my concern for the increase in residential property taxes, which does in fact affect owners and renters, especially for those homeowners under 55 who cannot take advantage of the Provincial Government’s deferral program.  But that’s another story!

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  • Michael Geller

    Frances, just to keep the discussion going. I do not disagree with the current proposal for the 1% shift to continue. I just could not support more shifting, which is how I read the question. I might add that I recently attended a property tax seminar and was astonished to learn that in the last 10 years we added approximately 40,000 new residential units in the city, but REDUCED the number of new businesses by approximately 4,000! This is what is contributing to the tax imbalance between businesses and residential properties.

    So rather than just focusing on increasing residential taxes, I think we must increase the number of businesses attracted to the city, as well as make the system fairer.

    Here’s an example of the problem. Under our current system, a small commercial building on a downtown site may pay $130,000 in taxes, and use $50,000 in services. So the city ‘makes’ $80,000. However, the residents of a new highrise on the same site will pay LESS in taxes, that’s right, all the apartments in the highrise will pay less than the two story older commercial building, but the cost of services will be significantly higher. As a result, the city will be ‘losing’ money on the redeveloped property.

    This has been going on for the past 10 years in the downtown. Did your readers know about it. I must confess, I didn’t! But now that I do, I would like to try and come up with some sensible solutions. Thanks for bringing public attention to the issue. I hope this helps.

  • Bill Lee

    How many gas stations?

    How many with mechanical bays and mechanics?

    What we should do is stop all Banks-on-corners that
    kill a neighbourhood. [See Kerrisdale west of Boulevard]
    Why does a bank with its closed curtains 19 hours of the day,
    have to be wider on the street than 4 metres, with the back
    offices upstairs not on the same floor?