Proposed bill for new BC split assessment aims to support struggling businesses
For years, small businesses have been struggling from wildly uncontrollable operating costs, largely as a result of skyrocketing property taxes. The problem has been so severe that a growing number of businesses, especially within Vancouver, have shuttered their doors from unfeasible cost conditions.
- See also:
But the BC Liberals are now aiming to tackle this issue, with MLA Todd Stone — the opposition’s municipal affairs and housing critic — introducing a private members bill last week in the legislature to create a split property assessment when calculating property taxes for small businesses.
Currently, small businesses are paying property taxes that also account for the value of unused, unbuilt airspace based on the site’s zoning. This means stores and restaurants are assessed and taxed as though there are additional floors with residential units above them, and sometimes the burden could be equivalent to massive condominium towers.
Property taxes are largely based on the determinations of BC Assessment, which evaluates properties based on their highest and best use. This can be influenced by a change in a community development plan that allows for greater density, and sometimes even a tower going up nearby can result in a small business being assessed on its potential to become a similar redevelopment.
Such patterns have been experienced across Metro Vancouver, but they have been most pronounced along arterial corridors, including in downtown Vancouver’s West End and most recently in South Granville.
Businesses within Robson Street’s retail area in the West End, for instance, saw steep increases in property taxes following the city’s implementation of the West End Community Plan. In Burnaby, a tile manufacturer recently saw its property taxes soar by 250% following a reclassification in the area allowing residential development near Production Way-University Station.
“Many small businesses, arts groups, and non-profits — most notably in the Lower Mainland — are facing huge tax spikes on the air above their heads,” said Stone in a statement.
“In some cases, organizations have seen 200% to 300% increases in property tax bills because they’re assessed at the highest and best use related to the undeveloped airspace above them. Despite urgent calls from local governments and stakeholders, the current government is not acting fast enough as small businesses struggle to survive and neighbourhoods are hollowed out.”
With a new split assessment classification, small businesses would see their property taxes substantially lowered. A new classification would be created for the empty space above small businesses, providing municipal governments with the ability to tax the unused airspace at a zero or near-zero rate. Small businesses would only pay property taxes for the property they actually use.
A new split assessment has been floated around for some years, and it is supported by various organizations representing businesses in the province. It was also included in various platforms in the last municipal election, and last month it was endorsed in a resolution at the Union of BC Municipalities convention.
Within the City of Vancouver, the tax rate for residential property is $1.34 per $1,000, but the rate for businesses is $4.27 per $1,000.
Follow Channels and Categories