eo FT tag over a period of years, usua and capping apply in this case. “insulated” (as from long ownership) from full tax increases, then local governments find themselves placing the large burden of budgetary increases on new or newly sold properties which will face percentage increases much higher than the budget increases of local government. This would have the effect of discouraging new residential construction. 1.2.3 Phasing This is a variation of capping or averaging, in which new values (or new tax levels) are phased in lly in equal stages. Similar comments to those given above for averaging 1.2.4 Assessment cycle British Columbia moved to a two-year assessment cycle fram the previous annual cycle as a restraint measure in 1983. The objective was to reduce the amounts spent on valuations and assessment appeals. The disadvantages are that assessments are not as current, which, in turn, leads taxpayers to doubt their validity, and, ina period cf fast changing values, the change over a two- year period can be significant. / For the latter reason in particular, the majority of raspondents who considered this topic urged a return to the annual assessment roii, feeling that it is worth the additional cost. A smaller number decided the two-year roll should remain, and one or two submissions were in favour of alonger period between revaluations. Comment: Returning to the annual assessment roll would, in most cases, have an effect similar to averaging, in that changes would be smaller than they are at present. If averaging were introduced as well, the combined effect would be a smoothing of value changes from one year to the next. 2.5 Provide additional notice of assessment and taxes cure for instability, commercial taxpayers felt they would be better able to deal with changing tax levels if they had more advance notice. Commercial tenants, in particular, are often unaware of the assessment, which is normally sent only to the landlord unless they ask for an additional copy. Tenants often only find out about their tax liability under their eases after it is too late to question the assessment, and when the taxes are already or imminently due. in addition to greater notice, some taxpayers called for improved design of assessment notices. A particular suggestion was to include information on the relative change in the assessment compared to the community average. _ Although this is not a 1.3 Cost The cost! of the assessment or tax changes discussed above would cause the tax burden to be radistributed among taxpayers, mostiy from those properties increasing rapidly in value to those increasing in vaiue more slowly. There would be no reduction in overall taxes. A change to an annual assessment roll from a two-year roll would not have a major cost. 9. CLASSIFICATION 2.1 Issue: All property in B governments can app ritish Colurnbia is placed into one or more of nine classes, Upon which local ly different tax rates. This method was initially introduced to avoid massive tax eevee 1 All cost estimates in this report have bean made by the Ministry of Finance and Corporate Relations. (TEM | PAGE Dlo ee 15