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Only Richmond businesses offered a break from “hot zone” tax increases

May 30th, 2011 · 12 Comments

The province’s news release last week that Richmond council would get special dispensation to give some of its commercial properties breaks on their taxes caught my eye.

For years, Vancouver businesses have complained that they end up getting whacked by soaring assessments and taxes in particular areas where speculators have started bidding up local land prices or where the zoning bills them for what could be on their land (a condo tower) but isn’t.

And, for years, I’ve heard there was no way to adjust the system to deal with that. But apparently that’s not true. The province has proposed legislation that would let Richmond set up a system to reduce taxes for business properties in the area between the Canada Line and the Richmond Oval, where high sale prices have resulted in regular businesses seeing their taxes so sky high.

I hear that there’s lots of buzz about this in the back corridors, as many are wondering why only Richmond. My Globe story here.

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  • jesse

    Because lowering taxes is the best way to balance the books. Neo-liberalism 101. How big is the City of Richmond’s debt again?

    Now for Vancouver, there is a real big problem coming for 2011’s assessment roll. Westside properties, and not just commercial ones, have been bid up to stratospheric heights. The differential in the change in sales prices from west to east is stark. That is going to be annoying for the pocket books of residents west of Ontario come 2012.

    Maybe the discussion should be worded as follows: who should be paying to fund city hall? Let me answer that one for everybody: not me!

  • mezzanine

    [rolls eyes]

    California, here we come…

  • mezzanine

    [rolls eyes]

    California, here we come…

  • Sharon

    I don’t think people appreciate how catastrophic this really is.

    The city revenue does not change – regardless of how assessments change from year to year. All that is affected is mil rate – or how the revenue pie gets sliced up between taxpayers.

    What is at stake here is the viability of our neighbourhoods as we know them today. Cambie is getting ready for density nodes along the Canada Line – that is not necessarily a bad decision. Marpole is talking about density and the new Safeway development – all good.

    The part that is NOT good is what happens to the existing business as the affected properties get rezoned and revalued. Are the renters of those properties to be considered collateral damage? How badly do we want those business locations operational until demolition day. How badly do we want the neighbourhood coffee shop in the block next to the new residential tower to still be there when the tower gets built?

    If this was happening to the residential sector, there would be riots in the street.

  • Everyman

    @jesse 1
    Of course west side property owners who are seniors (and there are more than a few) can just keep deferring their tax bill. Which is done on the backs of everybody else.

  • rf

    How about we just triple the property taxes of non-resident foreign owners?

    Is that really that crazy of an idea?

    What is crazy is that we are one of the only jurisdictions in the world that does not smack extra taxes on non-resident”specu-squaters”.

  • @rf: “non-resident foreign owners?”

    Non-resident foreign owners, or simply non-resident owners? Is an Albertan a foreigner? How about a Victorian? Or a Burnabyian [sic]? How about a resident Canadian living in Taipei?

    Or maybe you mean taxing unoccupied housing?

    @Everyman, yes this is true. But deferring is deferring. The City gets its money via the provincial government that underwrites the loan, no? And repayment is superior at time of sale; in the end, no free lunch and more interest payments for homeowners.

  • Bill Lee

    @ Everyman (comment 5)
    East Side, West Side. StatCan can do the work for you with a bit of effort.
    I’m sure that the City bought cross-tabulations on age, ownership etc.
    There are not as many seniors as you imagine owning a home anymore, in the city. East side taxes are not onerous for many new seniors with CPP and other monies.

    But the broad public census numbers don’t identify people, just aggregates.
    See:
    http://preview.tinyurl.com/yv5jp3
    2001 Community Profile for Vancouver, Census .
    Total population of Vancouver 545670, Children 0-19: 101059 Seniors 65+ 70355 Median age 37.2 Number of families (households) 134385

    Lived in the same address 5 years ago (mobility measure) 249135, number of owned dwellings 103340, number of rented dwellings 132655, Average (2001) value of dwelling $358374

    More here. http://vancouver.ca/commsvcs/planning/stats/index.htm

  • Sean

    It’s worth noting that Section 19(8) of the Assessment Act already provides relief for long-time RESIDENTIAL property owners from this sort of thing. See the following URL:

    http://www.bcassessment.bc.ca/public/Fact%20Sheets/Section%2019%288%29%20of%20Assessment%20Act%20-%20Special%20assessments%20for%20certain%20long%20term%20residents.aspx

  • @Sean, this applies to rezonings or obviously underutilized land. If comparables zoned RS-N and are rebuilt as RS-N I don’t know if the application would be accepted.

    Remember we are talking significant increases in land value on large single family lots, in some areas to the tune of $400-500K or more in a few short months. That is going to hurt unless the province/City does something to ameliorate the higher prices. An easy “fix” could be to take the lower of the previous 2 years’ assessment like what was done a couple of years ago but methinks many residents who didn’t “luck out” might be a bit annoyed they are picking up more of the aggregate bill.

  • Sean, thanks for your link to the Special Provisions…this is very important since it addresses one of the reasons planners often do not properly pre-zone land…that’s right…the city often does not zone land for the use it should be put to, since it argues this will increase property taxes for longstanding residents who want to remain in their homes…well the Section of the Act allows this to happen. Take note, dear friends Randy Pecarski and Neal Lamontagne!

    Of course, further changes could be made to legislation to better address this problem for more lonstanding property owners.

    The other reason some jurisdictions do not properly ‘prezone’ land is that they want to play ‘Let’s make a deal’ with the developer when it comes to determinining Community Amenity Contributions. This too could be addressed by establishing CAC’s on a per square foot basis in advance, based on the cost of providing additional amenities, rather than the ‘lift’ in land value.

    On the broader issue, this action by Richmond Council is significant. However, as I have often said on this blog, it is time to comprehensively review the BC property tax system. While it is better than many other jurisdictions, it could still be improved to recognize the inevitable changes in land use and development patterns.

  • Agreed Michael ” it is time to comprehensively review the BC property tax system”. The excessive cost increases Vancouver has seen, especially recently is also cause for concern, particularly because of the effect it has on both purchasers’ and renters’ affordability at all levels.