Land Averaging For 2019 Property Tax In Vancouver
Land averaging was introduced in Vancouver only, to relieve taxpayers of an unreasonable increase in taxes over the previous year. Hence where “assessed” values have increased substantially over the previous year, a formula has been created to determine each assessment.
In the past, the city has averaged the last 3 years assessed land values and added the improvement value to get “taxable value”. In 2019 it went to 5 years. Note that “Taxable” value is different from “Assessed” value.
Classes of property that can be affected by land averaging include Class 1 - Residential, Class 5 -Light Industrial and Class 6 - Business.
Each year City Council sets the threshold. For 2019 it is as follows:
Class 1 Residential
Threshold for averaging 11.67477%
Class 5 Light Industrial and Class 6 Business
Threshold for averaging 33.63921%.
Your property qualifies for averaging, if the percentage change is greater than the above %. Info on your property can be found on the City of Vancouver web site.
STEP 1 – calculate % difference
Current Total Assessed Value less previous year Total Taxable Value = % change
Previous year’s Total Taxable Land (averaged) & Building Value
If that % change is greater than the threshold, then the land will be averaged and the taxable value will be different from the assessed value. If the % change is less than the threshold then the taxable land value will be at the assessed value.
STEP 2 – Land averaging
Add together the last 5 years land values and divide by 5 to get average. Add building value to get potential Taxable value.
STEP 3 – Minimum value
However, the value cannot be below the previous years “taxable” value x the threshold %.