Taxes in the District of Sechelt will go up 2.5 per cent this year, but average homeowners could actually pay 4.96 per cent less on their tax bill.
The unusual outcome is the result of a $200 increase in the homeowner grant this year. The maximum basic homeowner grant for 2011 is $770, while the maximum additional grant for seniors and those with disabilities sits at $1,070 this year.
Chief financial officer Andrea DeBucy outlined the effect of the grant for councillors at their April 12 extraordinary committee of the whole meeting.
She showed an example of an average property assessed at $431,411. The total tax bill prior to applying for the homeowner grant was estimated at $3,091.67. When you subtract the $770 homeowner grant, that lowers the tax bill to $2,321.67, which would result in a 4.96 per cent decrease from the previous year's tax bill calculated at $2,442.85.
Coun. Keith Thirkell noted the grant would lessen the tax burden on homeowners who live in their homes, but it would not be available for those who rent out property on the Sunshine Coast.
"If the person is the primary occupant of their own house, they can apply for the grant, but it doesn't apply to renters," Thirkell said, noting renters may see a raise in rent to pay for the 2.5 per cent tax increase some landlords will have to front.
The maximum annual increase a landlord can issue to a tenant in B.C. is inflation plus two per cent, as per the Landlord Tenant Act.
Councillors seemed satisfied with the 2.5 per cent tax increase, although some were looking for a higher taxation rate to help pay for upcoming sewer infrastructure expenditures and capital projects. Even at a 3.5 per cent increase in taxes, DeBucy showed an estimated decrease of 3.78 per cent in the overall tax bill for the average homeowner who receives a homeowner grant.
"I think that with the increase in the homeowner's grant it means it isn't an increase to our citizens," said Coun. Alice Lutes. "We know that our cost of living is at least two per cent, if not more. That's been debated and we know it's going up with energy costs. We have to start looking ahead to other capital projects beyond this next year. So to just barely break even, I don't think is being very frugal. I think that three per cent is something we can all live with."
A motion for a three per cent tax increase was defeated with a tie vote of three-three between Lutes, Coun. Ann Kershaw and Mayor Darren Inkster, who were in favour, and Coun. Warren Allan, Coun. Alice Janisch and Thirkell opposed. Coun. Fred Taylor was absent from the meeting.
Kershaw moved another motion for a 2.75 per cent increase, which was also struck down in a tie vote.
In the end a 2.5 per cent increase was approved with Janisch, Kershaw, Thirkell and Lutes in favour and Allan and Inkster opposed.
The decision will now go to the April 20 regular council meeting where the five-year financial plan and tax rate bylaw is expected to receive first and second reading. Third reading should come to the May 4 council meeting. The final adoption must be done by May 11, which is when the bylaw must be submitted to the province.
