As soon as residents began to receive their annual property value assessments in the mail last week, and news spread that Powell River's 26 per cent average increase was the highest in the Vancouver Island, Gulf Islands and Powell River region, there was the usual panic about higher property taxes.
Instead of homeowners being excited that their assets and investments had increased in value, many were expressing concern about how much more they would have to pay the city in taxes.
According to City of Powell River council, higher property assessments do not directly correspond with higher taxes. In fact, city council has already committed to keeping taxes as low as possible this year and are currently considering an inflationary increase of around two per cent.
Yes, the highest property assessments in the region, tied with Ucluelet, will factor in to council's decision on how much to raise taxes, but the idea that taxes would go up even close to the increase in property assessments is purely misinformed panic.
Two key factors affect municipal taxes: the city's revenue requirement to provide all of its services and run the city, and the total assessed value of all of the properties within city limits.
When planning an operating budget for each year, property tax rates are set so that estimated revenue equals estimated costs.
The city divides the revenue requirement by the total assessed value of all properties to come up with a tax rate. At this point, an individual property's assessment comes into play. If that assessment is above the average of 26 per cent, then the property owner pays a little more, and if the assessment is below the 26 per cent, they pay a little less.
Rest assured, property taxes will be going up only a few percentage points this year at the most, not anywhere close to the 26 per cent average increase in assessments.
Calculated by BC Assessment, a provincial crown corporation that values properties throughout BC, a number of factors can affect assessments, including home renovations and sales in the area.
Shouldn't homeowners be happy that Powell River's property values are going up?
This means the market is strong and their property assets and investments are worth more. If that results in marginally higher taxes, then so be it.
Jason Schreurs, publisher/editor