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

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1 All cost estimates in this report have bean made by the Ministry of Finance and Corporate Relations.

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