Property taxes: City staff advise against 2% shift from businesses to homeowners
Vancouver city staff are recommending that councillors vote against shifting a percentage of commercial property taxes onto residential owners – a move originally proposed as a way to support local businesses struggling to keep up with rising fees.
The city announced it would explore the option of the two-per-cent tax shift late last year, but a report is now discouraging the move, saying it would not effectively target those businesses than need that relief.
That's because in B.C., taxes are assessed on a property's market value. That means even an under-developed building's taxes would be based on the property's much higher development potential.
"Based on BC Assessment’s preliminary analysis, approximately 3,000 (21 per cent) of commercial properties in Vancouver are deemed under-developed, with their assessed values reflecting a higher and better use relative to their existing use," the report read, adding that "a blanket two per cent tax shift from commercial to residential does not effectively target the 21 per cent of commercial properties impacted by assessment volatility arising from development potential."
But if that relief comes, it will be too late for businesses like Mount Pleasant's Kea Foods, whose owners say property taxes forced them to close. Last year, the business' bill was $60,000.
And one business advocate says the same problem is plaguing many businesses across the city.
"What's important to a city is the vibrant neighbourhood, and if you lose your local businesses, the money doesn't stay here, people don't work locally and they can't shop," Leonard Schein told CTV News Vancouver.
"The city and the province are both to blame. They both do things that hurt local businesses."
Those two levels of government are exploring an option called "split assessment," a process that would differentiate between a building's assessed development value and its existing value to help create a lower tax rate.
According to the city staff report, this model "could provide the most targeted and time-limited tax relief to small businesses currently residing in under-developed properties."
And one Vancouver councillor says the city needs to make sure the tax system is fair.
"Property tax is the one tool the City of Vancouver has and we need to make sure our assessments are equitable," Sarah Kirby-Yung told CTV. "We need to support our businesses now. They can't wait. "
With files from CTV News Vancouver's Angela Jung