Business owner criticizes BC Assessment’s methodology for determining property values
Business owners in Kerrisdale and their advocates are questioning how BC Assessment determines commercial property values because they say its system of factoring in market-rent increases in neighbouring buildings is misleading.
They are also bemoaning what for some are property-tax hikes in excess of 20 per cent in advance of the July 3 deadline for paying property tax to the City of Vancouver.
Kerrisdale Cameras owner Linda Hudson told BIV that what she considers BC Assessment’s wrongheaded approach to determining property values has sent her tax bill soaring.
Much of her property-tax hike stems from a higher property assessment, with the building on her property at 2170 West 41st Avenue soaring in value in mid-2023 by 370 per cent year-over-year to $729,000, from $155,000.
BC Assessment number crunchers deemed that Hudson’s land in mid-2023 was worth $3.522 million, or the exact same value as the land was worth the year before. It was her building’s jump in value that sent Hudson’s overall property value to $4,251,000, up 15.6 per cent from $3,677,000 one year earlier.
Hudson complained to BC Assessment but she said she was not given any satisfaction.
“They did the assessment based on market rents, instead of the usual method, which is based on sales in the area,” Hudson said.
Hudson said a woman at BC Assessment explained to her that there were no sales of land in the area and that this was why the property assessments for buildings would be based on market rents.
“She did not seem to understand that an old building like this should not have the same rent as a newer building,” Hudson said.
Hudson both owns the building and occupies it with one of her seven Kerrisdale Cameras stores. Her grandparents launched the business in 1961, and when her father passed away in 2011, she took over the business, she said.
Business advocate, and Ryan ULC Property Tax Principal, Paul Sullivan told BIV this afternoon that his calculations show that the average Kerrisdale business owner on West 41st Avenue between Yew and Arbutus streets has seen soaring tax hikes.
“Because of what I say are some erroneous assumptions from BC Assessment, Kerrisdale property values have gone up 20 per cent to 25 per cent,” he said. “The average change in commercial property values in the entire city of Vancouver is -7 per cent. So if you go up 20 and the average is -7, you’re 27 per cent above the average.”
He said that this is the first year in more than a decade that commercial property values fell in value city-wide.
“One reason for that decline is that redevelopment land value has actually gone down,” he said. “Two, interest rates are higher and there is slower absorption and with values in the condo market, redevelopment land is worth less.”
Another reason for the lower overall average value for commercial properties is a much lower price for office properties, in the wake of more people working at home. The office class of real estate is a big chunk of all commercial properties, he said.
Tax bills for Kerrisdale business owners this year went up by more than just the rise in assessed values of their properties because the City of Vancouver hiked property taxes by 7.5 per cent for this year, Sullivan added.
“The municipal budget for all taxpayers, residential and commercial, was up seven and a half percent this year,” he said.
Sullivan is advocating not only for business property-tax relief, but also a return to a core-services municipal budget, he said.
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