Property Tax 101 Web: www.bcappraisers.com Email: p.sullivan@bcappraisers.com Direct: 604.331.7300

What Determines your Property Tax? Ad Valorem system Two main components; Assessed Value and Tax Rate Assessed Value Based upon market value July 1st Valuation Date October 31st Physical Condition & Permitted Use date Highest & Best Use Must be Equitable

What Determines your Property Tax? cont’d Classification Based upon actual use of the property 9 different property classes in the Province Each class as a different tax rate Class 1 = Residential and Class 6 = Business / Other Tax Rate applied per $1,000 of Assessed Value Example Assessed value $1,000,000 Tax Rate of 15 mills Tax = ($1,000,000/1,000) x 15 = $15,000

What Determines your Property Tax? cont’d Tax Rate Determined by Taxing Jurisdiction Revenue Neutral Average Value Change by Class is what Matters

How are you Affected by Property Tax? Property Taxes becoming a larger operating cost Cannot Eliminate it, but understanding allows for planning Owner or Tenant? Gross or Triple Net Lease? Especially important to understand Property Tax implications when Renewing or signing a New Lease Allows for Budgeting

What Can you do about it? The Assessment can be reviewed and appealed Various Stages Pre- Roll Consultation (Sept to Dec) Assessment notices Mailed ( beginning of January) First Level Appeal Deadline to Property Assessment Review Panel (end of January) Second Level Appeal Deadline to Property Assessment Appeal Board (end of April)

What Can you do about it? cont’d What to look for… Assessment is lesser of market value or equitable value Understanding the Assessment Act and Case Law Confirm Classification is applied correctly Building area and Physical Characteristics are correct

Property Tax Issues are Always Evolving Framework Generally Static Understanding Legislative Changes Case Law brings change and sets Precedent Market Place and Trends can be volatile

Prescribed Classes of Properties Classification 2016 Value % of Roll % of # Class 01 – Residential $239 billion 83.10% 92.07% Class 02 – Utility $223 million 0.08% 0.10% Class 03 – Supportive Housing $0 0.0% 0.00% Class 04 – Heavy Industry $200 million 0.07% 0.01% Class 05 – Light Industry $1 billion 0.37% 0.21% Class 06 – Business/Other $47 billion 16.23% 7.10% Class 08 – Non-Profit/Recreational $426 million 0.15% 0.45% Class 09 – Farm $187,000 Total un-averaged 2016 Vancouver Roll $288.3 billion Total # of Properties 202,415  

2016 Property Tax Rates (per $1000 Taxable Value) Municipal tax rate bylaws are required to be adopted before May 15th of each year. 2016 Property Tax Rates (per $1000 Taxable Value)

2017 Budget Summary Property Tax $751 million Utility Fees Program Fees $66 million License & Development Fees Parking Cost Recoveries, Grants & Donations $39 million Rental, Lease & Other $26 million Revenue Sharing Bylaw Fines $13 million Investment Income

Municipal Taxes Payable vs Total Property Tax

Past vs Present

In 1983, the Province empowered the municipalities to determine property tax allocation for each class of properties.

Assessment Growth In Vancouver VALUE

Growth in Properties in Vancouver # of Properties

Regional

Metro Vancouver – 2016 Tax Burden   Business/Other Municipality Burden % of Assessment Vancouver 44% 16% Richmond 36% Burnaby 40% City of Langley 26% City of North Vancouver 34% 15% Coquitlam 30% 9% New Westminster 32% 13% Delta 23% 11% Surrey Average (excluding Vancouver) Source: Ministry of Community and Rural Development: 2016 Local Government Statistics

Consumption of Services 2016   Residential Classes Business Classes Total General Levy Paid $367,870 $315,631 % Paid of Levy 53.8% 46.2% % Services Consumed 76% 24% Value of Services Consumed $519,460 $164,040 $ Levy Paid Per Consumed $0.71 $1.92

Hot Issues

VFTC Core Issues Tax Distribution between Commercial & Residential (Fixed levy system) Hot Spots (Highest & Best Use versus Interim Use)

Number of New Properties

Tax Topography Tax Revenue vs Demand on Services

703 Denman St (+269%)

774 Denman St (+261%)

1059 / 1075 Nelson St (+365%)

1610 Robson St (+268%)

1019 Nelson St (+1046%)