The Vancouver real estate market may seem a bit on the downside for its residents. Properties here rank as the “least affordable” in the whole North America.  A new study revealed that when comparing the median home prices to median household incomes, Greater Vancouver came up on top (so to speak). Its median home price of $800,220 is 11 times that of the median home income of $72,662.

So now the residents of Vancouver are worried that they still have to pay taxes too. When prices of homes are already high and then you still have to worry about mortgage interest rates, everything paints a troubling picture.

Lowest Tax Rates

Yet the truth is that when it comes to real estate taxes, the people of Vancouver actually have it the easiest. That’s because the Vancouver property tax rate is only at 0.24%. That’s the lowest rate among any city in Canada, or even in the US for that matter. In comparison, the lowest real estate tax rate in the US is in Honolulu, where it’s 0.33%.

So if you’re buying a home in Vancouver for a million dollars, you only need to add $2,468 in property taxes. That’s better than in Toronto, where your million-dollar house will require you to pay $6,355 more in real estate taxes. It’s much worse in Ottawa, where that same house will also come with $10,684 in property taxes.

The low rates do have a reason. Many of the homes which were previously considered middle-class neighborhoods now fetch more than $2 million. Since tax rates are based on current home prices, many retired homeowners may feel the burden of paying too height taxes.

Actual Tax Rates

The current value of homes in a city can be a much more influential factor in determining just how much in taxes you have to pay, compared to the tax rates. When you consider the price of the average home in city coupled with the area’s tax rate, Vancouver is no longer the lowest.

Quebec City is among the lowest with $2,282 in taxes, followed by St. Johns with $2,516 and Saskatoon with $2,576. In comparison, Hamilton has the highest tax amounts for their average homes, with taxes reaching $6,939. Mississauga follows with $5,980 along with Toronto with $5,238. These high taxes are due to how prices for homes in Southern Ontario have risen dramatically over the last few years.

Future Developments

The city council of Vancouver (along with the B.C. provincial government) did take steps to try to curb the growth of high prices. Vancouver put in a new tax surcharge on properties worth more than $3 million, which angered some rich homeowners. The entire province of British Columbia also increased the tax for foreign buyers from 15% to 20%.

These new taxes and many other changes did affect the real estate market, as more buyers slowed down. That’s why in July of 2018, home sales in Greater Vancouver was the lowest in 18 years.

It’s hoped by many that other homeowners won’t have to pay taxes that are much too high.  In general, when prices of homes soar, city councils try to reduce the tax rate so that homeowners aren’t shocked by the drastic increase in property taxes. Cities tend to assess tax rates differently each year, and next year the rates may be lower. John Tory, the mayor of Toronto, even proclaimed that property tax increases will be limited to the rate of inflation.

Hopefully, taxes may be lowered—or else current homeowners will curse how their suddenly pricey homes are costing them a lot of money!