Long-suffering readers will know I have an axe to grind with the lopsided property tax scheme employed in and around the Whitehorse area. Given that the good people of the territory will be paying their property taxes this week and next, I thought it would be a good time to revisit the unfairness created by the current system.
The biggest issue I have with the current property tax scheme is that residents of Granger and Copper Ridge pay, on average, 25 per cent more in property tax than Riverdale and Porter Creek residents with equivalent sized homes.
The Granger/Riverdale disparity is a bit of a mystery, though I believe it is likely a result of the Riverdale homes being built in the ‘60s and ‘70s and the replacement value set by the assessors failing to keep up with inflation. When the Granger and Copper Ridge subdivisions were built in the ‘90s modern replacement costs were assigned, which resulted in a disparity with the older neighbourhoods whose assessment hadn’t kept up with inflation.
A secondary issue, but no less important, is that homes in Wolf Creek and Mary Lake pay twice as much property tax as similar homes in Golden Horn just outside of city limits.
The Wolf Creek and Mary Lake disparity is a byproduct of the difference between the Yukon government mill rate and City of Whitehorse mill rate. This creates winners and losers, as people who live in Golden Horn enjoy access to the City of Whitehorse while paying a much smaller Yukon government property tax bill.
In order to bring some order to the chaos, I have suggested that property taxes in Golden Horn be brought into line with city taxes or, conversely, that Wolf Creek assessments be brought into line with Golden Horn. It doesn’t make sense to have similar homes in similar areas paying different property taxes.
In regards to residential lots in the City of Whitehorse proper I’ve made a bolder suggestion, which is that we move away from assessments altogether and introduce a fixed tax per lot, with a different fixed rate for each area of town. This approach is possible in Whitehorse as we have managed to create pretty homogenous neighbourhoods that contain roughly the same type of lots and houses.
For example, when looking at Riverdale it is clear that most of the lots are around the same size and the houses are all around the same price. Why go through all of the trouble to figure out whether Riverdale House A is worth $300,000 and Riverdale House B is worth $320,000? The difference in property tax payable between those two is $200 a year, around $15 a month. I suggest we simplify the entire system and just pick a median number for Riverdale and have all homeowners pay that number each year regardless of the home on the lot.
Same would apply for Porter Creek, Crestview and Wolf Creek, which contain pretty similar types of lots and homes.
Just pick a median number and apply it to all lots in the neighbourhood. Condos and apartment buildings would have their own assessments as well. The plan simplifies the assessment process while also making it easier for city council to communicate increases in property tax to citizens, as it is much more transparent to say “Riverdale residents you will each pay $50 more a year” than it is to say “we are increasing the mill rate by .01 per cent.”
By applying fixed rates we will solve the Granger/Riverdale disparity, as we will have a median number that will explain why areas are paying the rates they are paying.
If you don’t buy my argument for a fixed residential rate, I hope you do agree that the city needs to take steps to end the property tax disparity across the city. To maintain the status quo just doesn’t make any sense, especially for residents of Granger and Copper Ridge. Whatever system we employ needs to treat all taxpayers fairly and ensure that people in similar circumstances are paying the same amount of tax. Granger and Copper Ridge are currently carrying more than their fair load.
As a final note, a quick look at local realty listings shows two houses for sale, one in Riverdale at 37 Alsek and one in Copper Ridge at 4 Zircon Lane, each at a price just shy of $350,000. The home on Alsek pays $3,300 in property tax. The home in Copper Ridge pays $4,400.
Again, this isn’t me hunting for situations that fit my theory – these are the first two homes I found on the realtor website around the same price in the different neighbourhoods. There is no real market reason why the Copper Ridge home should pay $1,100 a year in property tax; it is a byproduct of something weird happening within the property tax system.
I promise to give the property tax issue a break for a while. In the meantime, I encourage all Granger and Copper Ridge citizens to contact a city councillor this tax season to complain about the situation. Hopefully something will be done before July 1, 2015.
Graham Lang is a Whitehorse lawyer and long-time Yukoner.