Letter to Horgan, James, Eby + reply from Eby’s office
RE West 3700 block West 1st Avenue
Sent: Sunday, March 18, 2018 3:13 PM
To: OfficeofthePremier, Office PREM:EX; Minister, FIN FIN:EX; Minister, AG AG:EX
Subject: Formal Protest Against Pending School Tax Levy Property Tax Surcharge
Dear Premier Horgan, Finance Minister James, and Attorney General Eby:
Further to a request from each of your Offices to place this protest formally in writing, please find attached the particulars regarding why my 89-year-old mother (who owns a $4.5M Assessed Value home in Vancouver), and many of her neighbors in the Jericho Beach area, are particularly upset at your Governments' proposed tax action, which will apparently affect 43,000 other homeowners in BC who own residential properties worth more than $3M, the vast majority of whom are likely totally unaware of what you are planning.
Before I get into the particulars of our collective objection, I would like to highlight the fact that this proposed Surcharge has received almost zero publicity from your Government, which is the major contributing factor why we only found out about it by sheer chance via 2 newspaper articles published early last week, and are reacting extremely negatively to what appears to be a "stealth tax", unlike the Speculation tax which you have publicized extensively.
I subsequently checked your 3-page "News Release" Budget announcement (http://bcbudget.gov.bc.ca/2018/default.htm) and saw no mention of this proposed tax, and it was only when reading the "Budget Highlights" document that I noticed a very short reference to the issue on page 2 in the 3rd bullet which read "stabilizing the housing market by increasing the property transfer tax and the school tax on the wealthiest homeowners who buy or own homes valued higher than $3 million", with zero detail about the actual tax rate (the rate structure was subsequently published in both articles, attached below my signature: how did the authors get the information and we didn't? Even the "Homes for BC: A 30-Point Plan..." PDF does not contain the numbers).
Did your Government hope nobody would notice if the proposed School Tax Levy Surcharge was under-publicized? Well, we're noticing now and are all very unhappy about it. I can only imagine what will happen when the other 43,000 BC residents find out about it...(by the way, I calculated that Chip Wilson will be paying an additional $301,000 per year on his Point Grey Road property - I'm sure he will not be amused)
Our 5 specific Objection Points follow:
1. It is an unfair tax: why is it targeted solely at people who own homes/properties worth $3M or more? Why is it not broadly based amongst all property owners in the Province, including Commercial, if the intent is to better fund the school system, which we strongly doubt? ALL homes in the Lower Mainland are going up in value, and speculation occurs in all price and size ranges. In the words of one of my mother's neighbors, "if the electorate want a tax and spend government, they must be prepared to equitably participate in the taxation side of that equation".
Further to Point 1, in the words of an expert commentator with whom we have been corresponding, "The Province should not be encroaching on the municipal tax base at all so they should not be encouraged to expand it. Rather, they should be withdrawing it as it proposes an unacceptable precedent for the Province to be going after further property taxes. Schools are a Provincial funding responsibility and should be coming out of the Provincial tax base. They are doing this in two ways that are a precedent. Not only are they taking more of the municipal tax base, they are also taking it as a straight percentage of Assessed Value without going through a mill rate. The Province has access to a vast number of taxation sources to gain more revenue without a tax grab of the municipal base."
2. This proposed School Tax Levy Surcharge is an asset tax, and not an income tax. As such it is not means-tested in any way with regard to the taxpayers' ability to pay.
3. It is a massive proposed increase: approximately 30% more than the 2018 City of Vancouver Property Tax amount for a home worth $4.5M, and 45% for a home worth $5.2M. Add on another anticipated minimum 8% City of Vancouver Property Tax increase in 2019 and the total increase will be 39% and higher.
4. Taxpayers should not be required to go into debt to the Province via deferring their tax payments if they are unable to pay the School Tax Levy Surcharge. And some taxpayers are not old enough to defer their tax and will be hard-pressed to pay this tax on top of their existing tax burden and mortgage payments.
5. West Side property owners have been hammered by escalating Property Taxes over the past 10 years: the average compound increase has been 9%, using the 3700 block West 1st as an example, vastly in excess of annual inflation rates. The absolute increase in the past 10 years has been 135% for one such property, and 193% for another.
Here is a sample for a house in the 3700 block West 1st Avenue (estimated for July 2018 based on the February 2018 increase of 10.8%):
% Increase, YOY
% Increase 2000-2018
Here is another example for a house in the 3700 block West 1st Avenue:
% Increase, YOY
% Increase 2005-2018
Note that some of us will be meeting with Mr. Eby at noon on Tuesday the 20th in his Constituency Office on Vancouver regarding this matter per an arrangement with his Constituency Assistant, Dulcy Anderson.
In closing, I will await your collective responses which I will subsequently share with our neighbourhood group, and in turn the West Point Grey Residents Association.
p.s. the two newspaper articles that alerted us to this issue can be found Here:
REPLY back from Eby’s office
Thank you for your email regarding the additional school tax on high-valued properties announced in Budget 2018. We appreciate your taking the time to share your feedback with us and have noted your concerns.
We see that you have already shared your message with the Honourable Carole James, Minister of Finance. Please be assured that your comments will be reviewed and included in any of the Minister’s upcoming discussions on this tax.
Thank you, again, for writing. We do appreciate hearing from you.