Vancouver to provide property tax relief to many businesses
Vancouver city council has given the green light to a pilot program that could save some businesses tens of thousands of dollars per year in property taxes.
The Development Potential Relief Program is possible thanks to a change in provincial legislation last year and Vancouver is the first municipality to test it out.
One and two-storey buildings line the streets in neighbourhoods like Mount Pleasant and West Fourth Avenue and often house the type of small local businesses that are the heartbeat of their communities.
"The taxation on some of these single level buildings has been outrageous and punitive for a long, long time,” said Neil Wyle, executive director of the Mount Pleasant Business Improvement Association.
The properties in question may one day be redeveloped into several stories of condos or apartments with ground floor commercial units – but in the meantime they are already being taxed at the same level as neighbouring mixed-use developments.
Many businesses in Vancouver have triple net leases which means it is the business owner, not the building owner, that is responsible for paying property taxes.
The way the city calculates property taxes for commercial buildings puts a lot of extra tax burden on those business owners.
"We heard a lot of concerns from the local economy and from the local small businesses due to the current structure,” said city councillor Lenny Zhou. “The land value is based on the best and highest use not the current use."
City staff will use a complex formula to determine specific savings amounts for qualifying properties but some could see a portion of their land value taxed at up to 50 per cent below the city’s usual tax rate for light industry and business properties.
"Ten-thousand dollars is ten-thousand dollars so that does make a difference,” said Wyles. “Especially for these businesses that have been struggling over the last few years with COVID and all of the other things."
The deadline to apply for the tax relief is the end of March — leaving just three weeks to get the word out so business owners can file their paperwork.
"I’m walking back to my office to form a list of businesses,” Wyle said. “There's probably 200 properties in this neighbourhood that need to be informed and I want to make sure they know that this is on the table for them."
City-wide, nearly 1,400 properties could benefit from the program and some of them contain multiple businesses.
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