B.C. Assessment gives longtime B.C. homeowners in redeveloping neighbourhoods an option to avoid being sideswiped on taxes by soaring value.
Longtime Metro Vancouver homeowners nervously watching their property values rise due to B.C.’s transit-oriented development legislation have an option to avoid being side-swiped by higher property taxes.
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B.C. Assessment, however, does give owners the option to apply to have their properties assessed on actual use, rather than potential use.
It has helped homeowners, such as those on Cambie Street who faced dramatic spikes in property value when Vancouver approved its Cambie corridor plan to upzone most of the street to higher-density housing.
For the moment, the development market in areas affected by the transit-oriented zones law has cooled substantially due to uncertainty around how municipalities will enact its requirements, according to appraiser and tax expert Paul Sullivan.
“We’re not seeing changes in land value,” said Sullivan, tax agent and regional leader for the tax-technology firm Ryan. “In fact, we’re seeing substantial declines in land value (in) an environment where there are no presales, high interest rates and high construction costs.”
But Sullivan says homeowners should be aware of the little-known Assessment Act actual-use provision because when the development market turns around, “we’re going to see some pretty spiky upturns in value.”
What is the provision?
Long-term residents in a neighbourhood that is changing can apply to B.C. Assessment requesting a special assessment on their properties that recognizes the value of what the property is being used for is less than the “highest and best use” associated with its development potential.
The provision is part of B.C. Assessment’s assessment review process and can be triggered by various reasons, not just new development, according to Bryan Murao, area assessor for the Lower Mainland.
“Even in quite simple scenarios — if you have, for example, a large lot that could be subdivided into two houses,” Murao said. “We have that kind of situation going on every year.”
Who is eligible for a special assessment?
Any long-term homeowner in a changing neighbourhood who owns a property that is less than two hectares in size, is used only for residential purposes and where no more than three families can qualify.
To be considered, the owner or spouse has to have lived in the home as a principal residence for a minimum of 10 years.
Also, the sales history of the neighbourhood has to show that the property has greater value for redevelopment than its existing residential use. Murao said rezoning approvals or provisions of new community plans are often not enough to trigger changes in value.
“The market has to first react to that (change),” Murao said. “We really try to pay attention to at what point are we seeing sales of houses in that neighbourhood not being bought for continued use as a house.”
How do homeowners apply?
Homeowners who are eligible can contact their local B.C. Assessment office to request the application, which is considered under the authority’s property assessment review panel process.
A description of the process on B.C. Assessment’s website highlights a deadline of Nov. 30 to submit applications for an assessment review, but Murao said that isn’t an absolute cutoff for 2025 assessments.
“All that Nov. 30 deadline is is a deadline to get it included in the completed (assessment) roll,” Murao said. “We have an early December cutoff for what you’re going to see on your assessment notice.”
Under the legislation, however, Murao said homeowners have until Jan. 31 of the following year to submit applications, which will be handled a little differently.
“(That) just means we have to process it through the (assessment) appeal process, not that the owner has to appeal,” Murao said. “But (we) put it through that so they can get the benefit, if they meet all the other conditions.”
How big a difference can it make?
“(That) means the taxes are significant and significantly more because of something that people often forget about called the additional school tax,” Geller said, referring to the additional school tax rate that starts to kick in on homes worth more than $3 million.
Geller added that he’s heard the comparison that owning a home in one of these zones is like “essentially winning the lottery.”
“However, if they don’t want to sell and want to stay in their home, then they don’t necessarily want to win that particular lottery.”