Ad valorem tax

An ad valorem tax is a tax calculated as a percentage of the value of something, rather than as a fixed amount. In British Columbia the two common examples in property matters are annual property taxes, based on the assessed value of land and improvements, and the Property Transfer Tax charged on registering a transfer of land, based on fair market value.

How BC law treats it

Annual property taxes are levied on values set by BC Assessment under the Assessment Act and collected under local government and school tax legislation. The tax on transfers is the provincial Property Transfer Tax under the Property Transfer Tax Act, RSBC 1996, c 378, which goes to general provincial revenue rather than funding local services.

What it means for your business

A business buying commercial property should budget for Property Transfer Tax at closing and for ongoing property taxes, which are often passed to tenants under a commercial lease.

Risks and common mistakes

Treating the purchase price as the only cost of a property acquisition can leave a buyer short at closing, since Property Transfer Tax is due when the transfer is registered.

Fulcrum's real estate lawyers can help with these issues.

General information about British Columbia and Canadian law, current to October 2026. It is not legal advice.