The Opposition B.C. Liberals introduced a private member’s bill Wednesday aimed at giving tax relief to commercial property owners.
Municipal affairs critic Todd Stone introduced a bill, the Assessment (Split Assessment Classification) Amendment Act, that would enable local governments to reduce property taxes on the development potential of a site.
During a press conference ahead of Wednesday’s legislative session, Stone said small businesses have been unfairly taxed because they are taxed at both the existing commercial rate as well as on the highest and best use of the air above their heads.
He said that speculative tax based on development potential of the site and the “air above it” has resulted in a number of Lower Mainland small businesses closing shop after facing consecutive years of massive increases.
“Many small businesses, arts groups, and non-profits are facing huge tax spikes on the air above their heads,” said Stone. “In some cases, organizations have seen 200 to 300 per cent increases in property tax bills because they’re assessed at the highest and best use related to the undeveloped airspace above them.
“Despite urgent calls from local governments and stakeholders, the current government is not acting fast enough as small businesses struggle to survive and neighbourhoods are hollowed out.”
If passed, the act will create a new commercial property sub-class local governments can use to provide property tax relief for organizations facing massive property tax increases based on development potential.
“This legislation will significantly lower property tax bills for small businesses, keeping B.C. a competitive place for entrepreneurs to thrive and innovation to grow,” said Liberal small business critic Coralee Oakes.
The proposed legislation would allow local governments to tax the undeveloped potential — the air space above a building — at zero or near-zero.
Generally, commercial property is taxed at a much higher rate than residential. In Vancouver, the tax rate for residential property is $1.34 per $1,000 of assessed value, while the rate for commercial property is about $4.27 per $1,000 of assessed value.
The Liberals are hoping to have the act passed into law and applicable for 2020 property taxes.