The latest edition of the B.C. Property Tax Gap Report turns it head to the disparity between commercial and residential property tax rates. This disparity, also known as the tax gap, is a measure of property tax fairness for small businesses—which is crucial, as 61% of you have identified property taxes as the most harmful tax.
Municipalities starting to listen—but big cities have big gaps
We have highlighted the unfairness of the tax system for more than 10 years, and municipalities are starting to take action. In 2015, the average tax gap was 2.6, meaning you pay over 2.5x what residents pay on the same valued property. This is down from the average of 2.9 in 2009.
Our 2016 report sheds light on a worrisome trend: as municipalities grow, they tend to put a greater tax burden on you and other small businesses. In 2015, the average tax gap for B.C.’s twenty largest cities was 3.04, well above the provincial average of was 2.60.
The worst tax gaps were found in some of the most populated municipalities: Coquitlam (4.24), Vancouver (4.15), and Burnaby (3.98).
How to close the gap
We know you will not stand for this unfairness, and neither do we. To alleviate property tax burdens on small business, we insist municipal governments should:
- Cap the property tax gap between businesses and residents at a maximum of 2 to 1.
- Provide earlier property tax notices for commercial taxpayers.
- Allow commercial taxpayers to remit taxes in monthly or quarterly installments.
- Extend the homeowners’ grant to business owners occupying live/work spaces.
- Close the gap without raising the business tax rate.
- Move away from a flat tax rate for residential properties.