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A property under construction is generally exempt from Additional School Tax (AST), HOWEVER land in the development phase prior to construction is TAXED as BC Assessment state that it has “no use.”
Any action you do or do not take before or after Oct 31 and November 30 will affect the amount of tax you have to pay.
BC Assessment determine the value of each property at July 1, 2020 using the income approach of valuation applying market rent rather than actual rent. Hence, your assessed value could be higher than market or appraised value.
Our research has uncovered several sales of properties with rents at market level ($11 - $12) that are showing the capitalization rates higher than the rates used by BC Assessment. BC Assessment should be using higher capitalization rates.
One's first impression is that Commercial landlords are having difficulty collecting rents, tenants are going out of business, new tenants are difficult to obtain with the rents achieved being below the pre-Covid levels.
The chart below details the average % difference in the value change for each class between July 2019 and July 2020, in BC Assessment’s opinion. Note that the assessed value for 2021 is the value at July 2020.
Last year, we found a number of overvalued development sites under construction. Until a few years ago, BC Assessment primarily used the Cost Approach, whereby they take the land value and add the development costs in place to obtain the total assessed value.
This is an extra tax imposed by the NDP on wealth. Unfortunately, Homebuilders have been caught in the web. Was it really the intent of the government to increase the cost of housing by making homebuilders pay extra tax for 2-4 years during the pre-construction phase? The following explains the status of and reasons for current Appeals to the Assessment Appeal Board or just skip to the conclusion.
Should an assessed value be challenged if a property qualifies for land averaging in the City of Vancouver?
Property tax is payable on July 2nd generally, however certain Municipalities have or are proposing to extend payment dates. These vary daily, hence a taxpayer should visit the municipal web site for the specific date.
A recent review of several apartment properties in Kitsilano showed BC ASSESSMENT has valued them as land rather than income investments. This is not correct.
The municipalities may have made An error in charging the extra school tax to developers.
The chart below details the % difference of the value change for each class between July 2018 and July 2019, in BC Assessment's opinion.
If your 2020 assessment, compared to your 2019 assessment, shows a greater increase than indicated or a lesser reduction, an appeal may be merited.
The NDP are proposing to change or legislate the following taxes on developers and land owners...
The assessed value of sites under construction is based upon their state and condition at October 31st, 2019. BCA are using either a cost approach or a residual value.
Land averaging was introduced in Vancouver only, to relieve taxpayers of an unreasonable increase in taxes over the previous year. Hence where "assessed" values have increased substantially over the previous year, a formula has been created to determine each assessment.
The chart below details the % difference of the value change for each class between July 2017 and July 2018, in BC Assessment's opinion.
The Amacon case is related to 1c(i) of the classification regulation 438. Any portion of value of vacant land or air above, that can be used for residential ONLY based upon zoning must be classified 01 residential.
The City of Vancouver enacted the Vancouver Vacancy Tax Bylaw to come into effect for 2018 under Bylaw #11674. The tax of 1% will be imposed if a property is deemed either unoccupied or vacant.
The total amount of assessed values has increased as indicated on the table. In general terms, that should result in a decrease in the tax rate (millrate).
Everyone knows there are only two certainties in life: Death and taxes. Most landlords, tenants, and property owners want to know if they are paying too much tax and what to do about it.
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 (more specifically detailed in previous articles). We suggested that Land goes from underground to the sky, thus any zoning that limited commercial development on any floors and allowed residential, should be classed residential.
Does the city have enough zoned land, if so, why do prices keep increasing? Should we rezone more land along transit lines?
If your % increase in value is greater than the average, you may be over assessed and an appeal merited. However, it is very important to make sure the assessment is not too low before appealing.
- Additional School Tax Exemption for Developers
- Minimizing Property Tax on Development Land
- Why Such An Increase 2021 Industrial Property Taxes?
- Burnaby Industrial Properties Appear to be Over-Assessed
- Have BC Assessment Over-assessed Retail Spaces
- 2021 Property Assessment Value Changes
- Assessment Of Residential Sites Under Construction
- Should Homebuilders Be Paying Additional School Tax?
- City of Vancouver Land Averaging 2020
- Government Assistance: Property Tax
- 2020 Assessment of Apartment Properties
- Development Sites: Is The Additional School Tax Applicable?
- 2020 Property Assessment Value Changes
- BC Lower Mainland Market Update 2020
- Taxes Affecting Real Estate In 2019
- Development of Sites Under Construction - 2020
- Land Averaging For 2019 Property Tax In Vancouver
- 2019 Property Assessment Value Changes
- Understanding B.C.'s Proportional Representation Referendum (PPTX)
- 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