Though it made noise about reducing the property tax burden on businesses, Victoria council voted Thursday to maintain the status quo on its tax-rate policy for 2023, meaning all property classes — other than industrial — will face a 6.15 per cent increase this year.
Council decided residential and business property owners will face the relatively modest increase this year as it seeks a 6.23 per cent increase in property taxes across the board, while major industry will face a 37 per cent increase in property taxes and light industrial properties face a 22 per cent rise.
According to the city, the changes in the industrial class reflect assessment increases.
The tax bill for the average residential property, with an assessed value of $1.05 million, is expected to increase $172 this year, while businesses with an average assessed value of $714,000 face an extra $445 in taxes.
Several councillors expressed concern about business taking the brunt of the tax hit this year, as the ratio of both business and industrial property taxes to residential taxes is now 3.8 to one.
“I think the longer-term goal is to try and get it back to three [to one] because it really talks about the economic vibrancy and the ability for small and medium-size business entities to remain in the downtown,” said Coun. Chris Coleman, noting businesses are already facing multiple cost increases.
City staff cautioned any change to the business tax rate would be reflected in increases on the residential side. Staff also noted a decision had to be made on the rates this week, meaning there was little time to work on an equitable solution this year.
Coun. Jeremy Caradonna said he was concerned about the jump in industrial taxes, something that should be kept top of mind for the tax-rate discussion next year.
“I think it’s too late in the game to do anything radical this year, but they’re all things that are very worthwhile to think about for future years and think about if we want to change our tax policy,” he said.
Jeff Bray, chief executive of the Downtown Victoria Business Association, said the group supports any effort to reduce the tax rate for businesses, but he understands it’s been a tough budget year.
Bray has floated the idea of reducing the tax rate for business by a fraction each year and transferring it over time to the residential side. “Because businesses pay a lot and don’t even get the same services that residences do,” he said.
This year, residential property owners will pay nearly 53 per cent of the property tax collected by Victoria, while businesses will pay 45.5 per cent. Industrial properties will pay about one per cent of the total tax bill.
Bray said downtown merchants are taking the increases in stride this year, given council’s work to fund revitalization efforts.
“This council has actually found $1 million within the budget for various initiatives focused entirely on downtown and that is not something at that scale that we saw in previous councils at all,” Bray said.
“We’re actually going to see some specific and direct investment in downtown that we didn’t see before. So we’re very pleased that this council is very attuned to some of the issues downtown.”
Greater Victoria Chamber chief executive Bruce Williams said business owners are facing “tremendous pressure” from inflation and higher financing costs, so even a small increase in taxes can be discouraging.
Williams said the Chamber would like municipalities to do more to help businesses by investing in safe communities and encouraging people to support local businesses through marketing efforts and hosting events.
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