The B.C. government has introduced an interim program for small businesses that will provide property tax relief.
But the BC Liberals says the proposed solution is not what small businesses, local governments and many other stakeholders were asking for, which was ending the tax on unused airspace.
The new program will apply to small businesses and non-profits, as well as arts and culture organizations, that are struggling with high lease costs as a result of years of rapidly increasing property values.
“Years of an out-of-control real estate market have resulted in unexpected tax spikes for many small businesses that pay property taxes as part of their commercial leases,” Housing minister Selina Robinson said.
“People have been asking for help, and today we’re offering a way for local governments to provide that help. This new program empowers local governments to provide immediate relief to the small businesses and organizations most affected by skyrocketing property taxes in their communities.”
The legislation gives municipalities the power to exempt, by bylaw, a portion of the assessed value of those properties in a way that works for their community.
The changes are expected to reduce the taxes paid by these properties, reducing lease costs for tenants with triple-net leases.
The legislation gives municipalities maximum flexibility to tailor the way they identify properties in need of relief in their communities and to set the amount of tax exemption for selected properties.
“Vancouver is being emptied out of music and performing art venues, art galleries and artist studios,” City of Vancouver Arts and Culture Advisory Committee, cultural spaces committee chair Brian McBay said.
“The city reported over 20 cultural spaces with approximately 400 artists were closed in the last year. The cultural sector is in a crisis and the province’s tax measures are the right step toward halting the closure of art spaces that bring joy and humanity to our democracy.”
Under the legislation, buildings must be assessed in a commercial class – Class 5 (Light Industry), Class 6 (Business and Other) or a combination of the two.
Liberal MLA Todd Stone says the legislation provides limited exemptions to tenants of triple-net leases, meaning other small businesses could continue to be taxed on the unused airspace about their heads.
Stone says he introduced his own legislation that would separate the existing value of buildings from the development potential of the site on which the building is currently located and tax it at a mill rate the works best for their individual communities.
“A broad coalition of stakeholders — including small businesses, chambers of commerce, boards of trade, and non-profits — have been collaborating for years on a solution to rising property taxes,” Stone said.
“What they all agreed on was the need for the province to allow for split-assessment, which is provided for in the bill that I introduced in the legislature last fall, and re-introduced again last week.”