How Your Property Tax Bill Works in BC

Your property tax notice shows one amount to pay, but it combines several taxes collected by your municipality. This guide is for homeowners and buyers in the Lower Mainland and Fraser Valley: what each line pays for, how your assessment and the tax rates set the amount, when the bill is due and how to pay it, and how the year's taxes are split when a home changes hands.

The short version

What's on your tax notice

Your municipality collects its own taxes and those of other public bodies, which set their own amounts. The lines vary by area, but you'll usually see:

• Municipal taxes. Set by your council for local services such as police, fire, roads, parks, recreation and libraries.
• School tax. Set by the province to help fund education. The province also charges an additional school tax on the part of a residential property's assessed value above $3 million.
• Regional taxes. In Metro Vancouver, a regional district line for services such as regional parks, air quality and regional planning, and a TransLink line for transit and roads. In Abbotsford, they are for the Fraser Valley Regional District and its regional hospital district.
• Other levies. For BC Assessment, which values property across BC, and the Municipal Finance Authority, which finances municipal infrastructure.
• Utilities and local charges. In Vancouver, houses and strata duplexes on flat-rate utilities are billed for them on the main tax notice; Surrey and Coquitlam send separate utility bills. Some notices also carry local area service charges.

In a rural area outside a municipality, the province's Surveyor of Taxes Office sends the notice instead.

How the amount is worked out

Most lines are your home's taxable assessed value multiplied by that body's rate for your property class. Homes are in the residential class, one of nine, and rates are written per $1,000 of value. At a combined rate of $3 per $1,000 (an example rate), a home assessed at $900,000 would owe $2,700 before any grant.

The value comes from BC Assessment. Your assessment notice, mailed at the end of December, shows your home's market value on July 1 of the previous year and its physical condition and permitted use on October 31. I explain how that number compares with what a home would sell for in BC Assessment vs Market Value. If you think it's wrong, contact BC Assessment early in January. You can also ask for a review by an independent Property Assessment Review Panel by the yearly deadline, usually January 31.

The rates come in spring. Your council adopts its budget, then sets its rates by bylaw before May 15. The province sets the school tax rates, and the other bodies set their own levies. Once a rate is set, it can't be appealed.

Why a higher assessment doesn't always mean a higher tax

BC Assessment says an increase in your assessment doesn't necessarily mean an increase in your property taxes. Rates are set to raise what each body needs, so when values rise across the board, the rate per $1,000 can fall. What matters most is how your value changed compared with the average change for your property class, and how much more your municipality needs to raise.

Here is a simplified example with one taxing body. Say the average home's value rose 10% and the municipality needs 5% more from homeowners. The rate would fall by about 4.5%, and the tax would change like this:

• Value up 20%: about 14.5% more tax.
• Value up 10%, the average: about 5% more tax.
• Value up 5%: about the same tax.
• Value unchanged: about 4.5% less tax.

When notices go out, BC Assessment's news release lists the typical change for houses in each community, and for strata homes in the larger ones, so you can compare.

When it's due, and what happens if you're late

Tax notices go out in late May or June. The province's default due date is July 2, and most Lower Mainland municipalities set an early July date. Surrey, Coquitlam and Abbotsford use July 2, and Surrey moves it to the next business day when July 2 falls on a weekend or holiday. Vancouver sends two notices a year: an advance notice due on the second business day of February and the main notice due on the second business day of July.

Under the province's default rules, unpaid current-year taxes get a 10% penalty after the due date, but municipalities can set their own scheme. Surrey and Coquitlam, for example, add 5% after the due date and another 5% in September.

Ways to pay

• Online or at your bank. Use the folio or roll number on your notice, and leave time for the payment to arrive by the due date.
• Prepayment plans. Vancouver, Surrey and Coquitlam offer plans that take monthly withdrawals from your bank account, from August to May, toward the next year's taxes. Check how the plan handles the balance: Surrey, for example, expects you to pay the rest yourself by the due date.
• Through your mortgage lender. FCAC, the Financial Consumer Agency of Canada, notes that some lenders collect and pay your property taxes for you, adding the amount to your regular payments. Surrey reminds owners that they are still responsible for paying on time.

Grants, deferment and the speculation tax

The home owner grant reduces the property tax on your principal residence if you qualify. You must apply every year, and a lender that pays your taxes won't apply for you. The province suggests applying after your notice arrives and before the due date; you can still apply until December 31, but penalties may apply to the unclaimed amount. Property tax deferment is a provincial loan program that lets eligible owners, such as those 55 or older, surviving spouses, people with disabilities and families with children, put off paying their annual taxes, with interest. I cover both in The Home Owner Grant and Property Tax Deferment.

BC's speculation and vacancy tax is a separate provincial tax. Owners in the taxable areas must complete a declaration every year by March 31; see BC's Speculation and Vacancy Tax.

When you buy or sell

Property taxes cover the calendar year but are due in early July, so a sale usually lands partway through. Your municipality doesn't split the bill by sale date; the lawyers or notaries do, on the statement of adjustments: the seller pays for the days before the adjustment date in your contract, and the buyer pays from that date on.

Say the year's taxes are $3,650, or $10 a day (an example):

• Adjustment date April 1: the bill isn't out yet, so it's estimated, and the seller credits you $900 for the 90 days from January 1; you pay the full bill when it's due.
• Adjustment date September 1: the seller has paid the year, so you reimburse $1,220 for the 122 days to December 31.

If you buy during the year, you can claim the home owner grant only if the previous owner didn't claim it, you didn't receive one for another property that year, and you live in the home as your principal residence when you apply. Your lawyer or notary should alert you to upcoming tax bills, and I list the other costs to plan for in Closing Costs in BC.

Questions homeowners often ask me

Why did my property tax go up when my assessment barely changed?

Your bill depends on the rates as well as your value. If your municipality's budget rose, most owners' taxes rise with it. And if your value held steady while the average fell, the rate per $1,000 goes up and your share of the total grows.

Can I appeal my property taxes?

Not the tax rate. You can challenge your assessed value: contact BC Assessment first, and if that doesn't settle it, file a notice of complaint by the deadline, usually January 31, so an independent review panel can look at it.

When are property taxes due in the Lower Mainland?

Most set an early July date, such as July 2 in Surrey, Coquitlam and Abbotsford, while Vancouver bills twice, with payments due in February and July. Pay by the date on your own notice to avoid a penalty.

If my lender pays my property taxes, do I still claim the home owner grant?

Yes. The province says a lender that pays your taxes won't claim the grant for you, so you or someone with your permission must apply each year, ideally before the due date, or the unclaimed amount can attract a penalty.

Who pays the property taxes in the year I buy a home?

You and the seller share them by date. The statement of adjustments credits or charges each of you for your part of the year, and if you complete before the bill is paid, you pay the full amount when it's due.

Planning a purchase? See how much house you can afford, compare the monthly costs when you rent or buy in Metro Vancouver, or try my mortgage calculator.

This article is general information, not tax or legal advice. The details come from the Province of BC, BC Assessment, FCAC, People's Law School and municipal tax pages, including those of Vancouver, Surrey, Coquitlam, Burnaby and Abbotsford, and were current at the time of writing; your own notices show the dates and amounts that apply to you. For the province's overview, see annual property tax in BC.