Assessment Appeal Board Changes Classification for Mixed Use
Development Sites

Problem

In 2012, Austin Real Estate Consultants recognized an anomaly in the system, whereby Gross Buildable Area (density), that could only be used for residential purposes, was being taxed at the higher 06 commercial rate. Townline’s property on Seymour and Davie Streets was appealed.

Example

In Vancouver where zoning permits 3 FSR residential and 2 FSR commercial, all is assessed at 06 commercial mill rate. It should be:

3/5 residential @ 3.67794
2/5 commercial @ 15.09118

A significant tax saving.

Logic

Assessment regulations state that only land:

  1. Having no use;
  2. Not zoned or used for commercial

Austin advanced the theory that “land includes not only the surface of the earth but everything under and over it” (RJ Werners Real EstateLlaw). The area above the ground level would house the residential space. It is thus in a “part” of the “land” that is or has no use and is not zoned for commercial and thus should have a residential classification.

Process

The Assessment Review Panel did not accept the concept and an appeal was lodged to the Assessment Appeal Board.

Team

Due to the significance of this appeal, Austin Real Estate Consultants invited Burgess, Cawley, Sullivan and Altus Group and lawyers Farris Vaughan to work on the project.

Hearing

The group concluded that Amacon’s property in the 1100 block of Seymour Street was the property of choice for the appeal.

BCA

BC Assessment believed the regulations meant that as the “land” (the ground or dirt) was in use as commercial, the property was not vacant EVEN THOUGH IT WAS PRIMARILY VALUED AS RESIDENTIAL LAND.

Inequality

Purely residential zoned land was paying significantly less tax than a similar development site allowing some commercial use.

Decision

Appeal Board 0710223 BC Ltd et al v. Area 09 – 2014 PAABBC 20140014 to be found at www.assessmentappeal.bc.ca (search all decisions section).

Tax

If the taxable value of a site is $10 million of which 3/5 of the site is only residential, the taxpayer would save $68,000.

Future

Where zoning permits part of a development site to have part of it limited to residential use only, then the value associated with that part should receive a residential classification.

If you have any questions please contact Peter Austin @ 604.733.3282 or email paustin@telus.net.