Buying a property in BC? Here’s everything you need to know about property taxes and reporting capital gains.
Not many people know that Canada basically has three types of governments: federal, territorial and provincial, and local. Each Province has its own municipality, and each of them, in return, determines where revenue comes from.
Taxing for households is typically divided into three separate tax categories: property tax, income tax and sale tax.
Property taxes are also common in Canada, and each Province decides how the tax base and tax rates are determined as well as what happens to the collected money afterwards.
The base for the property tax is real property — this is defined as land and improvements to the land. From here on, each Province will treat any other machinery and equipment differently, deciding whether to include them as part of the property value or not.
In this article, we’ll talk extensively about property taxes in British Columbia. Our aim is to give you all the information you need to understand what BC property tax is all about, and when you need to pay it.
What Is Property Tax After All?
Property tax is directed at homeowners who own any type of land or property. If you own a home or land, you will need to pay your yearly property tax. If you are new to owning property then learning the ropes of this will be really helpful. This tax is based on the assessed value of that certain property and not on the owner’s equity.
In some Provinces, the property tax is meant to fund some of the costs of elementary and secondary education. Another purpose of this tax is to fund city services such as the fire department, the police, and public transit.
These purposes will vary slightly, and we’ll soon discover what happens to the BC property tax as well.
This tax is usually calculated by applying the rate to each $1,000 of taxable assessed value. As there are several fixed property classes, homeowners looking to understand how much they need to pay first must identify the property class their property fits into.
How Does BC Property Tax Work?
Each Province sets their own property tax and, although the rules are vastly the same, there are differences from one Province to another. The property tax in British Columbia has its own specifics, and it’s our aim to shed a light on them.
How Do You Know Your Property’s Value?
In British Columbia, your property will be valued based on a valuation completed on the date of July 1 of each year by the BC Assessment Authority. Each January, you will receive an assessment notice via mail to inform you regarding your assessed value, property classification and tax exemption statu. This will give you all the information you need regarding your BC property tax.
How Is The Property Tax Rate Set?
Every early spring, the taxing authority sets its property tax rates for each of the nine property classes. It uses the applicable rate to your property’s assessed value, which will be residential — since yours is a residential property.
Property owners also need to know that from this amount, any tax exemption value will be subtracted.
Please note that your property tax BC payment due date will be on July 1, so make sure you pay attention to your property tax notice and pay yours on time.
How Much Is Property Tax In BC?
Every $1,000 of your property’s taxable value will have a specific amount of dollars attached to it representing the property tax. In 2021, the amount of the BC property tax is $2.92250, while the previous year it was $2.92568, which means this year it’s slightly lower.
However, in 2019 this dollar amount per every $1,000 of the property’s taxable value was $2.56116.
As soon as your property assessment has been made, you can know for sure what your amount is. Using the property assessment information to calculate your tax is easy, and anyone can do it.
If you own a home valued at $3 million or more, you may also need to pay an additional school tax. Applying this school tax is common in some Provinces.
Homeowner Grants And Property Tax Deferment
For what it’s worth, you can also apply for your homeowner grant in order to get a reduction on the BC property tax you need to pay. Most eligible property owners will qualify for a regular grant, which is $570 for properties located in the Capital Regional District, the Metro Vancouver Regional District, and the Fraser Valley Regional District.
The possibilities for homeowner grants do not stop here. For example, apart from the regular grant, you may also qualify for an additional one if you are:
- A veteran
- A person with a disability
- Living with a spouse or relative with a disability
- A senior
- A spouse or relative of a deceased owner
There are also two property tax deferment programs you may be eligible to cut back on your BC property tax:
- The Regular Program – You may qualify if you’re either over 50 years old, a surviving spouse of any age, or a person with disabilities.
- The Families With Children Program – You may qualify if you’re a parent, a stepparent, or financially supporting a child.
How Often Do You Pay Property Tax In BC?
Whether you own or lease a property or manufactured home in BC, you will need to pay your property taxes yearly. As we’ve said before, you need to do so by July 1.
Where Do Property Taxes Go In BC?
There are a wide number of programs and services that are funded via your property tax in BC, and these are:
- Road construction and maintenance
- Emergency rescue services
- Police and fire protection
- Hospitals
- Recreation and community centers
- Schools
- Garbage services
- Libraries
- Parks
Any new type of service started by a community needs to be funded by that said community.
How Do I Pay My Rural Property Tax Online In BC?
Thankfully, there is a quick and easy way to pay your rural property tax online.
First of all, you will need to visit the eTaxBc’s website and log into it, or enrol. If you don’t have an account, you can create one easily.
Final Words
We offer a wide variety of mortgage and equity mortgage options in BC, ranging from traditional to private and alternative ones. Our goal? To help you choose the one that best suits your needs. We also provide our clients with valuable information regarding the real estate market in Canada.
If you have any financial worries at all and feel like you can’t meet the deadline for your BC property tax, contact us and let us offer our professional support.
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