Classification of Mixed Use Properties September 2016 Update

The Assessment Act, in a nutshell, says any land that is vacant and not zoned or held for commercial or industrial purposes should be classified residential.

What is land? In my opinion, it went from underground to the sky (if that were true, then any zoning that limited commercial development on any floors and allowed residential, should be classed residential).

Ludmila Herbst, a lawyer at Farris Vaughan, agreed with me, and together with other property tax consultants, selected Amacon as having the best property for a test case. The Appeal Board agreed, but BCA appealed.

On February 1st, 2016, Madame Justice Lane dismissed her appeal, (http://canlii.ca/t/gn5ml), but she referred the appeal back to the Board to clarify the reasons for their decision.

BC Assessment believed this could give them an opportunity to introduce new evidence. After a further presentation, the Board refused the introduction of further evidence and provided more detailed reasons for their decision. The date for a BCA appeal is now past.

The outcome:

  • Air space is land for assessment purposes
  • If the land/air is vacant, it can qualify under the Assessment Act for a split classification
  • Any airspace that can be used, according to the zoning bylaw, for residential only, should receive a residential class
  • This will apply to commercial properties that have commercial on the main or second floor, if the property is not fully developed

In C-2B sites can be developed with 1.5 FSR on the 1st and 2nd floors and residential for the balance of the 2.5 FSR. 40% of the assessed value should have a residential class.

In C-2C and C-2C1, only residential is permitted on the 3rd floor. The FSR is 3 so the class should be 33% residential at a minimum.

An initial reaction from BCA is that they propose to narrowly interpret the decision, however they have advised that they will review the application of the case to the above zonings and advise by October 10th, 2016.

Peter Austin, BSc. AACI, CArb

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