Vancouver city councillors to consider 4.9 per cent property tax increase

City of Vancouver officials are asking councillorsto consider a 4.9 per cent property tax increase for 2019.

Staff cited three reasons for the proposed hike, including inflation, the province's new Employer Health Tax to replacethe elimination of MSPpremiums and the cost of new infrastructure.

If approved, the 4.9 increase would amount to an extra $108 next year for the median homeowner, $41 for the median strata owner and anincrease of $193 for the medianbusiness property owner.

Staff is proposing anoperating budget of $1.5 billion for 2019and a new capital project budget of $371 million.

In itsbudget document, the city says there has been a significant gap between expenditure growth and revenue growth, which requires a higher tax increase than what was approved in 2018.

That budget approved an increase of4.24 per cent, which has higher than the planned 3.9 per cent.

"We face the challenge of maintaining core services at the level our residents and businesses expect, while at the same time making the right investments for the future to ensure we can respond to the pressures and opportunities of a growing city," wrote city manager Sadhu Johnston in the budget document.

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The proposed 2019 increase of 4.9 per cent reflects a number of factors, including inflation,(2.2 per cent), the property tax impact of the provincial government's new Employer Health Tax (1.7 per cent), and the additional investments in infrastructure renewal approved in the 2019-2022 Capital Plan (oneper cent).

The budget also proposes an8.7 per cent increase in utility fees.

That hike would amount to an increase of $119 for a median single-family homeowner and a $115 increase for a median business property.

The Employer Health Tax was announced by the government in February's budget. It will charge companies a percentage of their payroll under a progressive taxation system.

Companies with a payroll under $500,000 will pay nothing and companies with a payroll over $1.5 million will pay 1.95 per cent of their payroll.

In the spring. the City of Vancouver said it spent $5 million in MSP payments in 2017 but would spent $15 million in 2020 with the payroll tax

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Priorities in the 2019 budget include increasing housing supply and affordability. The city says the first year of the Empty Homes Tax program generated close to $30 million in net revenue to help with initiatives.

Councillorswill receivea presentation on the 2019 budgeton Tuesday at 9:30 a.m. PT.

City officials say that the average combined municipal property tax and utility fees for the median single-family home in 2018 was $3,814. Vancouver came in below that at $3,609.

The city also says over the past 10 years, Vancouver has faced some of the lowest property tax increase across Metro Vancouver. The 10-year average for Vancouver is below three per cent.