The District of Kitimat has voted unanimously to keep their 2019 flat tax rate of $630 in place, plus a three per cent increase to account for budget increases.
The tax first came into being in 1990 when the Municipal Act was amended to allow for the system. The amendment was repealed in 1992, however areas that were using the system, including Kitimat, were able to continue to use it.
While eliminating the flat tax altogther would increase the spread in the total amount of taxes paid by low and high assessment properties, staff pointed out in their report to council that many municipal services, including police, fire and animal control are unrelated to property value. Staff added that higher property value assessments are not necessarily indicative of people with lots of money and could be a hinderance to businesses which would otherwise benefit from the flat tax.
“We are not aware of any formal analysis in B.C. demonstrating the correlation between income and assessment of a desidence,” the report to the District says.
Staff also pointed out that with Kitimat’s current housing market experiencing the paradoxical scenario of both extremely high vacancy rates and increasing rent prices that the flat tax rate serves to help smooth property tax swings.
Once a municipality decides to stop using the flat tax it cannot be reinstated.