At Vancouver City Council today, BC Assessment officials were on hand to discuss the latest valuation of properties in the city. The details are highly technical, but it was interesting to learn that the total value in Vancouver is now $480 billion, a 600% increase in just 20 years.
What the discussion also reminded me was that properties are assessed taxes not necessarily on their actual value but rather on what their current zoning considers the “highest and best use” of the lot. In other words, if you live in a single house that is zoned for, say, a duplex, the owner pays tax as if the duplex already existed. Even more egregiously, if you own a small business property, say a single-storey building that is in a zone that allows a 20-storey tower, the assessment valuation can be for the latter.
Under this arrangement, property taxes are taken for what might be rather than for what is. This makes no sense to me. Moreover, it could lead to a situation where a Council can increase its revenues simply by up-zoning — a cash grab.
It has also been the case that developers owning upzoned vacant lots that they are not yet ready to develop can argue for a change of temporary change of use to, say, community gardens, relieving them of about 70% of the assessment cost. I would argue that to receive this kind of benefit, they must agree that no building will take place for at least, say, ten years. I understand that householders who have resided in their property for at least 10 years can apply for a current use valuation, so developers should be required to meet the same time period.
More broadly, I would propose that all assessments be based on current actual use rather than the zoned potential, to be reassessed on the issuance date of a development permit. Such a change should benefit both private householders, small businesses, and developers alike.