Property tax on a multiplex home, and the grant that reduces it

Where the assessed value comes from

BC Assessment, a provincial authority separate from your municipality, values every property in the province each year and sends owners a notice. That value is what your tax is calculated on.

Two things follow from that. The first is that your assessed value is not your purchase price and will often differ from it, in either direction. The second is that a rise in your assessment does not automatically mean a rise in your tax, because the rates are set afterwards against the total value in the municipality. If every home in a city rises by the same proportion, the rates can fall to collect the same amount.

What genuinely changes your bill is your value moving differently from everybody else's. A home whose assessment rises more than the local average will usually pay more, and one that rises less will usually pay less.

If you think an assessment is wrong, there is a formal appeal process with a deadline printed on the notice. Buyers of brand new homes should read the first notice carefully, because a home that was not finished on the valuation date can be assessed differently from how it will be assessed once complete.

The home owner grant

The Province reduces property tax on a principal residence through the home owner grant. The Province sets the regular grant at $570, available in full where the assessed or partitioned value is $2,075,000 or less.

Above that threshold the grant is reduced by $5 for each $1,000 of assessed value, and it reaches zero at $2,189,000 for the regular grant. There is also a minimum: you must pay at least $350 in property tax after the regular grant is applied, so the grant cannot reduce a bill to nothing.

The grant has to be claimed. It is not applied automatically, and claiming it late is the most common avoidable property tax mistake we hear about. The claim is made annually, and it is worth putting a reminder in the calendar next to the payment date.

Additional grants exist for people aged 65 and over, veterans and people with disabilities, with their own thresholds. If somebody in your household might qualify, check before assuming the regular grant is all you get.

When it is due, and how to pay it

Property tax is billed annually by your municipality, with a due date and a penalty for paying late that is usually a percentage of the outstanding amount. The penalty is applied automatically and it is not small, so the date matters.

Most municipalities offer a monthly prepayment plan that spreads the cost across the year. For a household on a monthly budget this is usually the easier approach, and it removes the risk of the date passing unnoticed.

If your mortgage lender collects property tax with your mortgage payment, they pay the bill on your behalf and you do not need to arrange anything. You do still need to claim the home owner grant yourself, which is where people caught by this arrangement usually go wrong.

There is also a provincial deferment programme for eligible owners, which lets qualifying households postpone payment. It is a loan against the property rather than a discount, and it is worth understanding properly before treating it as free money.

What is different about a strata home

Your multiplex home is a separately titled strata lot, so it gets its own assessment notice and its own tax bill. You are not paying a share of a building's tax, and your neighbours' bills are their own.

The common property of the building is generally accounted for within the assessments of the individual homes rather than billed separately, so you should not expect a second bill through the strata for property tax on the shared parts.

One thing worth checking on a new home is whether the assessment reflects the finished home or an unfinished one. If a building was incomplete on the valuation date, the first notice can be markedly lower than the second, and a household that budgeted from the first bill can be surprised by the second.

Finally, property tax is one of the few costs where a family buying two homes in the same building gets no efficiency at all. Two homes, two assessments, two bills, two grant claims. Put both claim dates in the same calendar.

One further point for households buying with family: only a principal residence attracts the home owner grant, and each household claims on its own home. Two related households living in two homes in the same building can each claim, provided each home is genuinely that household's principal residence. A home owned by one household and occupied by another is a different case and worth checking rather than assuming.

Keep the assessment notices as they arrive. Over a few years they show how your home's value is moving relative to the neighbourhood, which is useful context when you come to sell and useful evidence if you ever want to appeal. They arrive in January and are easy to discard, which is exactly why almost nobody has the last five.

If you are comparing homes in Vancouver and Burnaby, remember that the two cities set their own rates and their own budgets, so an identical assessed value produces a different bill in each. That difference is not large enough to decide where you live, and it is large enough to belong in a proper comparison of two homes at the same price.

Set the payment date and the grant claim date in the same reminder, since they are the two things a household can actually get wrong here.

Estimating before you buy

You can get close to the real number before making an offer, which is worth doing when you are comparing homes in different municipalities.

Look up the property on BC Assessment, which publishes assessed values, to see what the home or its neighbours are assessed at. Then find your municipality's current tax rate for residential property on its own website, and multiply. Subtract the home owner grant if the home will be your principal residence.

We are deliberately not printing municipal rates on this page. They are set annually by each city, they change every year, and a number typed into a guide is wrong the moment the next budget passes. Get it from the city's own tax rate page, which will also tell you the year it applies to.

For a brand new home with no assessment history, ask the seller what the estimated assessment is and treat it as an estimate. Then look at what comparable finished homes nearby are assessed at, which will usually be closer to what you end up paying.

Questions buyers ask

More in Cost of Owning

• Your monthly totalBuilding the whole figure from documents you can get before you buy
• Insurance, both kindsThe strata's building policy, your own policy, and the gap between them
• Taxes if nobody lives thereSpeculation and vacancy tax, and Vancouver's Empty Homes Tax

Also worth reading

• Affordability calculator