We recognize that some small businesses and other commercial tenants in the arts, culture, and non-profit sector are struggling to pay high property taxes passed on by their commercial landlords.
Causes of the higher property taxes
- Property is assessed by BC Assessment at its "highest and best use", meaning development potential—even if it is not yet built—is taxed in BC.
- Real estate speculation and other factors, such as zoning changes, have driven up land value significantly in some areas.
- Under “highest and best use”, land with a single-storey commercial building on it may be valued as if it were built out as a multi-storey residential tower.
- Most commercial property owners are passing on the increased cost of property taxes to their tenants through triple net leases.
We are limited in what we can do under the current provincial legislation.
What is a triple net lease?
A common commercial lease agreement that makes the lessee responsible for property taxes and other variable lease-related expenses with only the basic rent amount confirmed for the term of the lease.
We have worked with other Metro Vancouver municipalities to propose a solution called “split assessment”.
In March 2020 the Province of BC enacted legislation to create an interim business property tax relief program for the 2020 tax year.
These two proposals both address issues with taxes being passed on to lease tenants, but are very different (review a comparison).