Capital parcel tax biggest culprit in massive Surrey tax increase

Property taxes in Surrey jumped by far more than the 2.9 per cent claimed by Mayor Doug McCallum. The biggest culprit is the capital parcel tax, which jumped by 200 per cent for every single property in the city. This is steep - and regressive.

Many Surrey residents are upset about the boost in their property taxes. Some say they have gone up 15 to 20 per cent - a far cry from Mayor Doug McCallum’s claim that they were only boosted a modest 2.9 per cent.

Property taxes are complex although Surrey, to its credit, breaks down the portion collected for its operations quite specifically. Not all municipalities do so. The Surrey property tax bill also includes a significant amount for schools, as well as small amounts for B.C. Assessment Authority, Metro Vancouver and TransLink.

There is no doubt that McCallum’s claim was misleading, right from the moment council adopted its 2021 budget. A 200 per cent increase in the parcel tax, from $100 to $300, ensured that everyone’s taxes would rise far more than the small amount he claimed. This boost applies to all properties, from the smallest apartment unit to the biggest home. Council watchers have noted this discrepancy and it has been widely discussed. Not everyone, of course, pays attention - until they actually get the bill in the mail.

Former mayor Bob Bose, who has crossed swords with McCallum for decades, while both served on council, pointed out to me that the parcel tax is also very regressive. The owner of the smallest studio apartment in Surrey City Centre pays the exact same amount as the owner of a multi-million dollar home on the Ocean Park bluff - $300.

It is even more regressive when applied to commercial properties. Bose said that Guildford Town Centre is located on two parcels of land, and thus would pay $600 in total in parcel tax. The owner of a small strata commercial space will pay $300.

It is also very uneven when applied to rental properties. While each owner of a strata apartment would pay $300, a rental apartment with 40 units would also pay $300. Thus property owners are punished more than tenants. This would also apply to commercial tenants, depending on how the property is surveyed and registered.

When it comes to the overall property tax, everyone is affected differently, because taxes are based on property assessments. The amount that taxes go up varies widely. This year’s taxes are based on estimated property values last July 1. Next year’s taxes will be based on assessments as of this July 1, and most assessments in Surrey will be going up substantially, due to the real estate boom in the early part of this year.

I took a detailed look at my property tax bill to try and get a better breakdown of where the increased taxes are going. In the case of the taxes Surrey collects for its own use, mine rose by 11 per cent. In addition to that, metered sewer rates went up nine per cent and metered water rates went up 8.5 per cent. Garbage and recycling rates are up three per cent.

Within that 11 per cent increase, the increased taxes varied widely. The police services portion was up 16 per cent, roads and traffic safety up 2.5 per cent and the general portion up 1.3 per cent.    

In the three other specific areas, bylaw services and public safety, fire services and parks and recreation, the portion of this year’s taxes going to each area went down by 14, 4.5 and 1.5 per cent respectively. It’s a good thing we don’t pay our taxes on a user-pay basis, because other than garbage and recycling collection, the most active city services in our neighbourhood this past year were provided by the fire department. There were two fires nearby in the past 10 months and both required a shutdown of the street and use of a hydrant located at the corner of our property.

It is not just Surrey asking for more money. Metro Vancouver gets an additional 16 per cent; so does TransLink. B.C. Assessment Authority gets an extra 2.6 per cent. The school portion of my tax bill went up 3.7 per cent. The Municipal Finance Authority (a borrowing agency for municipalities) wants an extra two cents worth from me - 33 cents this year, as compared to 31 cents last year.

Ultimately, Surrey voters will determine in October, 2022 if McCallum’s claims about taxes are worthy of discipline. Despite a dramatic reduction in many city services over the past 16 months, everyone (including renters, who pay taxes indirectly through their rent) in Surrey is paying a lot more this year than they were last year. Businesses are also facing significant tax increases, even though many have been dramatically affected by the pandemic. That is the real bottom line.