|Central Coquitlam residential high rises. (Photo by Terry O)|
As appreciative as I was of the compliment, I had to tell him that the increased assessment of that magnitude also likely means that he will be facing a higher-than-average property-tax increase this year -- not in the realm of Port Moody's average 6.65% jump, mind you, but still above the average 3.34% hike that Coquitlam homeowners will face this year.
He seemed a bit confused by my comment, so I did some explaining. And the thought then struck me that many other homeowners may be somewhat perplexed by our property-tax system as well, so here's an explanation.
When I joined with the majority on Council in the late fall in voting 8-1 in favour of adopting our most recent budget (more about which I'll discuss below), I did so knowing full well that the 3.34% residential increase would be applied exactly against only those whose property value rose (or fell) by the exact same figure that the average residential property's value in Coquitlam rose (or fell). And it turns out that the average Coquitlam home enjoyed an increase of 5.59% in its value, according to assessment figures made public earlier this month.
With this assessment figure now in hand, and with the knowledge of what its ultimate revenue needs for the year are, the City will now set one universal residential mill rate (which is amount of tax payable per dollar of the assessed value of a property) and apply that rate evenly against all residential properties. Follow the logic, and you'll see that if your home rose in value more than the average 5.59%, your tax increase will be more than 3.34%, and if it rose less (or even fell somewhat), your increase will be less or maybe you'll even enjoy a decrease.
I'm guessing that my friend's $60,000-plus assessment increase represents something like a 7% or 8% increase in assessed value, so his property-tax increase will be greater than the 3.34% average. For my part, our now-long-in-the-tooth Eagle Ridge home recorded an assessment increase of just under 1%, which means our property-tax increase will be lower than the 3.34% average.
(You find more details about the City's five-year financial plan here.)
And, while we're on the subject of the budget, I'd like to take this opportunity to get a few more things on the record. First, Council actually passed a budget increase of 2.95%. The average homeowner faces the higher, 3.34% increase, because Council embraced a one-point "tax shift" that sees the commercial/business sector facing an increase of only 2.34%. We did this because the business-tax rate in Coquitlam is among the highest in the region, and we are attempting to lower it to somewhere around the middle of the pack.
Some readers might recall that, in the last election, I signed the Canadian Federation of Independent Businesses' pledge, promising to work towards business-tax reductions. I am happy to report that, for the second year in a row, the majority of Council has voted for a one-point tax shift.
I am also pleased that, for the second year in a row, we have reduced the overall rate of property-tax increase in the City -- another one of my promises. As stated above, the average increase for 2013 is 2.95%; in 2012, it was 3.16%; and in 2011, it was 3.18%.
I believe we are headed in the right direction, and I will continue to work towards greater fiscal responsibility and a lower rate of property-tax-increase growth, while also meeting the legitimate needs of Coquitlam residents.