Recently I wrote a letter describing increases in the municipal tax rate over the last three years. In that letter I erroneously stated that this rate was unrelated to the assessed value of your home. Mayor Milne and Councilor Kasper have explained in their responses this rate is in fact related to the average assessed value of residential property, and my research has confirmed this. Basically if the district wants to keep the same level of taxes year after year, and the average assessed value goes down, then the tax rate has to go up in order to collect the same amount. As well, if the average assessed value of residential property goes up, then the tax rate has to go down for the same reason. In theory this would mean residents would pay the same amount of property tax every year. In Sooke’s case the average assessed value has decreased over the last three years, so as a result the municipal tax rate has increased to keep pace. In my case the assessed value of my home has gone down the last three years, however my municipal taxes have increased for these years, so I guess I am not average. I am assuming this is not the case for everyone.
I have always assumed that if the value of my property goes down I pay less property tax, and I am sure this is a commonly held belief, but this is not necessarily the case. I think it should clearly state in the pamphlet accompanying our property tax notice that the tax rate increases are required in order to collect the same amount of taxes as the previous year, including the percentage of the increase. Despite what Mayor Milne says in his response, this is not obvious from the documentation that comes with the tax notice. It is the marketing of the taxes and the “accomplishments” of the current council in this pamphlet that I have an issue with. I have a feeling that if the tax rate had decreased this would be clearly stated.
I appreciate the responses of Mayor Milne and Councillor Kasper. This discussion has provided valuable insight to the residents of Sooke about how our property taxes are calculated.