When I received my first municipal tax bill in 2008, I remember being surprised at the existence and size of the flat taxes, which were increased since then and have recently begun to be reduced. Somewhere in the past, the Flat Tax Foxes got into the Kimberley Municipal Tax Henhouse. This taxpayer believes we should eliminate the flat taxes altogether. I’m not alone.
In general, Canadian tax systems are progressive ones. It is generally accepted that taxes increase with income and that it is reasonable that wealthier people pay a higher tax. The City of Kimberley property tax charges are based on a mill rate per thousand of assessed value. In 2016 (the last year I can find a tax notice for) that rate, for residential, was 0.0915235 % of the taxable value of the property.
In Kimberley, those who have cheaper smaller homes, with lower assessed values and generally lower incomes, pay tax at higher rates than those who own more expensive larger homes with higher assessed values and who generally have higher incomes. Folks in smaller homes are usually singles, young people starting out, or retired people, and are not usually the targets for higher tax rates.
To analyze the effect of the flat tax, I’ve compared the 2016 taxes on my 1 bedroom 1 bath home (assessed at $139,200) with homes assessed at twice, three times and four times that assessment and at $1 million. The table below explains.
The taxes on more expensive properties of 3, 4 and more times the value, should not be producing municipal taxes at a much lower rate than smaller homes. I am charged a rate of tax 53% more than a one-million-dollar house! One can reasonably assume that larger properties, with more occupants, larger lots, more cars, more everything, consume more of this city’s resources, not less.
If we were to compute in the water, sewer and garbage charges (all ‘flat taxes’), the distortion in charges would be even more extreme. Multi-bedroom homes with more bathrooms with large tubs and even hot tubs use more water and generate more sewage. They produce more garbage from more occupants. Yet they are charged the same as a one-bathroom house. That is unfair.
Wealthy folks are used to the Canadian proportionate tax systems. They shouldn’t be discouraged by our mill rate taxes; they are used to them elsewhere and can afford them more than lower income folks. In any event, it is doubtful that any increase in municipal taxes will deter the building of large homes, given that land is relatively cheap in Kimberley. Incidentally, rather than encouraging large homes, climate issues mean we should be encouraging smaller homes.
For taxes to be acceptable, they must be fair and be seen to be fair. Kimberley’s flat tax system produces unfair results. Owners of smaller homes should not be subsidizing large homes. It is right and fair to proceed towards eliminating the flat tax.
Incidentally, the taxes on an average home in Fernie, Invermere, Kelowna, Rossland and Nelson are all higher than on an average Kimberley home.
430 Wallinger Ave