BRITISH COLUMBIA – Small businesses and non-profit organizations paying high property taxes because of future development potential may see some financial relief through new municipal property tax rate flexibility.
This support comes at a time when rising assessed values and associated property taxes are leaving some small businesses with unsustainable cost increases. This has been most significant in Metro Vancouver, where increasing density to accommodate a growing population has led to property value increases in recent years.
Municipalities will have the ability to identify what types of properties or areas in their community are affected by high-density development potential and to provide relief to the commercial properties that need it most by taxing the assessed value of the land at a reduced municipal tax rate.
The tax measure will be in place for the 2023 tax year, replacing the Interim Business Property Tax Relief program introduced in March 2020.
Challenges with split assessments were first identified in BC in 2014. The tax change is an outcome of the Property Assessment Strategic Review, launched by the Ministry of Finance in 2019, to fully assess and analyze property tax mitigation strategies for small businesses and find a long-term solution.
“The legislation introduced addresses a concern that has been raised by UBCM’s members,” said Jen Ford, president, Union of BC Municipalities (UBCM). “This change enables local governments to provide tax relief for commercial properties that have seen dramatic increases in the assessed value of their land. Local governments were consulted as a part of the process of developing this legislation, and I welcome the Province’s action to address this issue.”
The new tax relief tool is permissive and not automatically applied; municipalities and taxing Treaty First Nations can decide whether or not to implement it. For properties that meet the provincial eligibility criteria, the municipalities can choose which properties receive the relief and set the percentage of land that will be taxed at the lower rate.
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