Encyclopedia
Mill rate
The property tax rate, expressed per thousand dollars of assessed value.
For example: An owner multiplies assessed value by the mill rate to estimate tax. (Illustration only, not a real deal.)
Official source: Assessment Act (BC Laws)
Example only, not a real client. Say two cities have different mill rates for business property. A building with the same assessed value pays more tax in the city with the higher rate. You factor that into your choice of location.
What I’d tell a friend
Compare property taxes, not just rent or price. Mill rates vary between cities and classes.
Why it matters to you
Small changes in the rate or the assessment add up over a year, especially on a large property. On a net lease tenants pay their share, so a rate increase lands on them without any change to the rent in the lease.
How to use it in your deal
For an owner, multiply your assessed value by the combined rate for your class to estimate the bill, then watch for the final rates in May. For a buyer, use the current year's actual tax notice, not the seller's estimate, and ask whether the assessment is likely to jump. For a tenant on a net lease, property tax is usually your biggest pass-through cost; ask for the last two tax notices. For a landlord, explain changes to tenants early, before the bill hits.
Mistakes I see
Comparing tax bills between cities without checking the class rates. Using last year's bill for a building that just sold, since a sale can push the next assessment up. Forgetting that one property can be split between classes.
In BC and Vancouver
Municipalities set rates under the Community Charter (Vancouver under the Vancouver Charter). The province sets non-residential school tax rates. BC Assessment sets values and classes.
Official sources: Community Charter (BC Laws) · Local Government Act (BC Laws) · BC Assessment appeal guide · Prescribed Classes of Property Regulation (BC Laws)
What it is
A mill rate is the tax rate applied to assessed value, expressed as dollars per thousand dollars of value.
Each municipality sets rates for each property class, and other bodies add their own rates.
Using it
Ask for recent tax bills when buying or leasing, since tenants often pay taxes as additional rent.
Check the municipality’s current rates for your property class, and remember that changes in assessed value can shift your share of the tax even if rates stay the same.
Questions to ask before you sign
- Which class or classes is this property in?
- What's the combined rate this year?
- How did the assessment change?
- Who pays under the lease?
- Is a relief program available?
Keep reading
Related terms: Assessed value, Class 6 Business and Other
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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.