Monday, June 8, 2015

Rethinking how TransLink property tax is assessed

Because of the Agricultural Land Reserve and Metro Vancouver’s Regional Growth Strategy, there are very rural places in the region with no access to transit service due to their low densities.

Like Metro Vancouver, Halifax Regional Municipality has urban and very rural areas. Up until 2009, it didn’t matter where you lived, you paid the same property tax for transit service in Halifax.

In 2009, recognizing the inequality of charging property tax to property owners without transit service, Halifax changed how transit service property tax was charged. Halifax introduced two transit taxes rate: a regional tax rate, and a local tax rate.

Halifax Local Transit Area Rate. Select map to enlarge.

The regional tax rate is applied to the majority of the municipality. This pays for regional transit service like express buses and ferry service. The local tax rate is also applied to properties within 1km of a bus route. For the 2014/15 tax year, the regional transportation rate was 5.1¢ per $100 of taxable assessment value. The local transit area rate was 10.5¢ per $100 of taxable assessment value.

In Langley, Gloucester Industrial Estates (a business park surrounded by farmland) and Salmon River/Uplands are two examples of areas which pay property tax to TransLink, but receive no local transit service. This has been a sore spot in the community for many years.

Now in Metro Vancouver, TransLink funds the major road network, major (non-provincial) bridges, cycling infrastructure, and transit service.

TransLink receives taxation revenue from fuel tax, property tax, parking tax, and a BC Hydro levy. In 2013, 42.6% of TransLink’s taxation revenue came from property tax.

57.4% of TransLink's taxation revenue isn’t property tax, this could be considered the regional taxation component used to help pay for the road network, bridges, cycling infrastructure, HandyDART, and major transit service like the West Coast Express, SkyTrain, and SeaBus.

Property tax could be thought of as the local transit area component. The South Coast British Columbia Transportation Authority Act, which governs TransLink, allows the creation of zones in the region where different tax rates could be applied based on “proximity to a transportation station, or to another major transportation facility.”

If the Mayors Council and TransLink Board agreed, they could follow the Halifax model. Property tax could be assessed on all land within 1km of a bus stop. Land outside this 1km zone could be assessed a tax rate of 0.

The goal of this process would be to create a fairer system, not to low property tax revenue. Property tax in areas with transit services would go up slightly.

If transit service coverage increases in the future, TransLink would gain access to new property tax revenue. At the same time, it would resolve many of the equality issues that come up in places like Langley. This change would create a win-win situation.

1 comment:

Brendan Dawe said...

Cool. Can I opt out of property taxes going to fund low density road services while we're at it?