Property tax

How BC law treats it

Valuation and taxation are separate steps. BC Assessment, under the Assessment Act, RSBC 1996, c 20, determines each property's assessed value and classification, generally as of July 1 of the year before the tax year, and mails assessment notices in early January. Local governments and the province then set tax rates and levy and collect the tax. Municipal taxes are levied under the Community Charter, SBC 2003, c 26, and, in the City of Vancouver, the Vancouver Charter, SBC 1953, c 55. Regional district and rural area taxes are levied under the Local Government Act, RSBC 2015, c 1 and the Taxation (Rural Area) Act, and the provincial school tax under the School Act. There is no general BC "Property Taxation Act". Tax rates differ by property class, and business and light industry classes usually pay much higher rates than residential. An owner who disagrees with an assessment must file a notice of complaint with the assessor no later than January 31 of the year after the assessment roll is completed (Assessment Act s. 33(2); grounds in s. 32). The Property Assessment Review Panel hears complaints, and a further appeal lies to the Property Assessment Appeal Board. Missing the January 31 deadline generally forfeits the challenge for that year. Unpaid property taxes become a charge on the land, attract penalties and interest and, if left long enough, can lead to a tax sale.

What it means for your business

For commercial property, property tax is often the largest operating cost after rent or mortgage payments. Most commercial leases are net leases that pass property taxes to tenants as additional rent, so tenants have a direct interest in an accurate assessment and should negotiate the right to contest it. Buyers adjust taxes on completion of a purchase. A missed January 31 complaint deadline locks in an overassessment for the full year, which can be costly on a high value property. Example: A Coquitlam warehouse owner receives a January notice valuing the property well above recent comparable sales. Because the net lease passes taxes to the tenant, the owner and tenant agree to file a notice of complaint before January 31 and share the cost of an appraisal.

Risks and common mistakes

Complaining to the city about an assessment, when complaints go to the assessor for the Property Assessment Review Panel. Missing the January 31 complaint deadline while negotiating informally. Commercial tenants signing net leases with no right to review or contest assessments. Overlooking property classification, which can matter as much as value to the tax bill. Forgetting to adjust property taxes between buyer and seller on the statement of adjustments.