Province considers help for Vancouver businesses hit by huge spike in property values
Property values in some areas have risen by as much as 300 per cent, meaning businesses must come up with tens or hundreds of thousands more in property tax
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The B.C. government is ready to sit down with the City of Vancouver to talk about how to help the many small businesses that have been hit with extraordinarily high property assessment increases this year.
Staff from either the Ministry of Community, Sport and Cultural Development or the Ministry of Small Business and Red Tape Reduction will meet with the City of Vancouver and the Urban Development Institute in the next two weeks “to better understand the concerns and examine current and potential mitigation tools,” according to government staffers.
Property assessments for Business Improvement Areas — the retail districts that anchor Vancouver’s neighbourhoods — normally rise between five and 10 per cent. This year the average increase for BIAs was 40 per cent. On some streets, such as the lower end of Robson between Jervis and Denman, property values have risen as much as 300 per cent. Other hotspots include Railtown and Strathcona, Mount Pleasant, the Broadway Corridor and Grandview-Woodlands.
Since many tenant businesses pay property taxes directly through their leases, these businesses will be hit with tens, and in some cases, hundreds of thousands more in property tax this year.
“We’ve heard from a couple of tenants that it’s really putting the squeeze on them and they have to reconsider whether or not it will continue to be financially viable to be in their continued location,” Joji Kumagai, executive director of the Strathcona Business Improvement Area, told Metro on Feb. 9.
While the City of Vancouver offers to average the increase over three years, property appraisal expert Paul Sullivan of Burgess Cawley Sullivan calls that “a joke” when the increase is so extreme.
The property assessment increases on lower Robson are the result of a new community plan that allows for increased density. The “hot spot” problem, where tenant businesses end up paying the higher commercial property tax rate on yet-to-be-build residential condos, has been around for years.
The city has long lobbied the provincial government to allow split assessments, so that businesses would end up paying the lower residential property tax rate on the unbuilt condos.
But even areas that aren’t zoned at all for residential, like industrial land in Strathcona and False Creek Flats, have seen property values more than double this year.