CLASSIFICATION FOR MIXED USE PROPERTY
Proposed residential sites that could be used potentially for any commercial use were totally classified as (06) commercial rather than (01) residential.
Due to the wording in the Assessment Act, two sites within a block, one zoned residential, and the other zoned commercial but permitting residential, would pay substantially different taxes (as much as four times as much). Both sites were bought at residential prices for residential use. For a commercial site, this was a double whammy as the value for residential was higher than commercial and then it was taxed at the higher mill rate. One of the unfair results was a significant inequity for commercial occupants in areas where residential land values were rising and the highest and best use was redevelopment. West Broadway in Vancouver is a prime example where taxes have risen dramatically for the small business.
Even though a zoning or land use contract permitted both residential and commercial use, the Assessment Act and the courts required the WHOLE site to be classified as commercial. The adjacent “Residential only” site received residential class and paid lesser taxes.
This is hopefully now over with Reg 323/2010, Order in Council 711. The regulation requires BC Assessment to split the classification on multiuse vacant properties between the various classes as appropriate. The regulation can be interpreted to say that assessment of vacant land will be based upon the following guidelines:
Class 1 property shall include only…..
(c) land which has no present use and which is neither specifically zoned nor
held for business, commercial or industrial purposes, except that
(i) if land is included in Class 9, it is not included in Class1, and
(A) a zoning bylaw under section 903 or 904 of the Local Government Act, a phased development agreement under section 905.1 of the Local Government Act, a covenant under section 219 of the Land Title Act, or a land use contract under the Local Government Act applies to the land, and
(B) the bylaw, agreement, covenant or contract, either itself or, if more than one applies, read together, permits a specified portion, or a percentage of the land to be used for residential purposes but does not permit that portion or percentage to be used for business, commercial or industrial purposes, other than a home occupation or bed and breakfast use in conjunction with a single family residence that is the principal residence of the owner or manager,
only that portion or percentage is included in Class 1:
Sections 903 and 904 give a local government the power to create land use zones and regulate the uses within those zones. Hence, logically, a stipulation that the ground floor property be used only for commercial purposes to a density of 1 FSR and all upper levels be at 2 FSR for residential, then class (01) should be 2/3rd and class (06) 1/3rd.
Section 905.1 permits a local government to enter into a “phased agreement” for a large property, setting out specific uses, and each area can now be separately classed according to proposed use. A land use contract now qualifies under the same circumstances. Previous court cases specifically denied split class under such circumstances.
- Understanding B.C.'s Proportional Representation Referendum (PPTX)
- NDP Property Tax Increases In 2019
- Amacon Update
- Vancouver Vacancy Tax
- 2018 Property Assessment Value Changes
- Misconceptions within the Property Assessment Process
- Mayor's Council Proposal for Funding Transit
- Resolving Disputes - A New Approach
- Mixed Use Properties - Potential reclassification for Property Taxation
- Classification of Mixed Use Properties September 2016 Update
- Possible Effects of FIT on Assessments
- BC Foreign Investors Tax
- NAIOP Industrial Panel
- Classification of Mixed Use Sites - Part 2
- Opportunities for Brokers
- Valuation of Properties Under Construction
- Is Assessed Value Equal to Market Value?
- Civil Resolution Tribunal Update - October 2014
- Assessment Appeal Board Changes Classification for Mixed Use Development Sites
- Strata Civil Resolution Tribunal Update
- Reviewing Appraisals - Download
- Resolving a Rental Dispute
- How are School Taxes Calculated? | doc