City of Kimberley council last night narrowly approved a motion to reduce the city’s Flat Tax by $80 a year for a 10-year phase out, with a corresponding increase to the mill rate tax to ensure no loss to total taxation revenue.

The change is seen as controversial by many city residents, with about 30 in attendance at the Special Flat Tax Public Meeting, as it will impact higher valued homes most.

According to city information, the Flat Tax was implemented in 1990 to alleviate the tax gap between the older low-value housing and new construction.

“The Flat Tax also recognized that use of some municipal services were constant among homeowners, despite the value of the home,” a city report noted.

The report states there would be no effect from the $80 Flat Tax reduction for the average single family home valued at $245,964, other than a 3.46% municipal tax increase of $73.

A $150,000 home will see a municipal tax increase of $15 ($44 tax increase less $29 saving from Flat Tax reduction) and a $700,000 home will see a tax increase of $313 ($158 tax increase plus $155 increase due to Flat Tax reduction.

The actual increases will vary depending on assessed value change from 2015, the city report pointed out.

It also stated the Flat Tax made up 71% of city taxes collected in 1990, while it was only 39% last year.

Voting in favour of the change to the Flat Tax was Councillor Kent Goodwin, who put the original motion forward, along with councillors Nigel Kitto, Bev Middlebrook and Darryl Oakley.

Voting against it were Mayor Don McCormick, who asked for a delay in the vote so council could get more information, and councillors Albert Hoglund and Sandra Roberts.

Councillors in favour said the 10-year period phase out period would allow the city to address any issues that may arise.

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