Why pricey Vancouver has Canada's lowest property tax rate
Vancouver homes are famously expensive, yet the city charges the lowest property tax in Canada as a share of assessed value. The explanation is simple arithmetic. Its budget has stayed fairly steady while property values soared, so dividing roughly the same bill across ever more valuable land pushes the rate down.
A property tax is levied on value rather than on income. A government appraises each property, or requires an appraisal, then charges in proportion. Rates are often given in mills, a mill being one-thousandth of a currency unit, so the bill is the assessed value multiplied by the mill rate and divided by 1,000. A home assessed at 50,000 dollars in a town charging 20 mills owes 1,000 dollars a year. Several layers of government can tax the same building, and properties are usually sorted into classes such as residential, commercial or vacant, each with its own rate.
Those classes can be used as levers. Israel doubles the rate on empty apartments compared with occupied ones, and France's tax on vacant properties succeeded in cutting the vacancy rate. The tax also differs from a land value tax, which ignores buildings and charges only for the land beneath them.
Countries lean on it to very different degrees. Armenia collects property tax worth about 0.2 percent of its economic output, against a global average near 2 percent, and in 2021 it switched to market-value assessments and scrapped its tax-free threshold. Australia combines a one-off stamp duty of around 5 percent, paid by buyers, with annual council rates of about 1,300 dollars for an average household, while most people are exempt from state land tax on their main home. Brazil's constitution even provides for a tax on large fortunes, although no regulation has ever defined how it applies.
In Canada it is the main source of revenue for most municipal governments. Ontario introduced it in 1849 through the Baldwin Act, which set up cities, towns and villages and required them to collect a tax that would also support schools. That link persists: Canadian bills typically combine a municipal portion with an education portion.
Source: Property tax
