British Columbia appeals property tax exemption decision on Musqueam-led project

It is believed to be the first time the province has intervened in a decision by the Assessment Appeal Board.

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The province has appealed a decision exempting a new property tax on a Musqueam First Nation housing project on University of British Columbia endowment land, which could benefit other developers.

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It is believed to be the first time the province has intervened in a decision by the Assessment Appeal Board.

Three weeks ago, an appeal board overturned an additional $ 2.2 million in taxes levied by the province on the property where the 1,200-unit Musqueam housing project is being built. The additional school tax – called AST – was introduced in 2018 by the NDP government of British Columbia as a surtax on residential properties valued at over $ 3 million and intended to raise funds to help resolve the housing crisis in British Columbia.

However, the appeal board ruled that it was inappropriate and counterproductive to apply the tax to residential properties under development, especially those that included rental housing at rates below market rates, as was the case with the Musqueam project.

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This was the board’s first decision to apply AST to this type of property.

The BC Assessment Authority – which sets the value of properties for tax purposes – also appeals the council’s decision.

Both appeals will be heard by the Supreme Court of British Columbia, but the province and the assessment authority, as a first step, filed the grounds for an appeal with the appeal board itself.

Council officials said those reasons are not public documents until they are filed in the Supreme Court in the coming weeks, but noted that appeals of the appeal committee’s decision cannot. be lodged only on a point of law. Thus, the Supreme Court proceedings will not constitute a full rehearing of the appeals decision on the property assessment.

In a written response to questions from Postmedia News, the British Columbia Ministry of Finance said the appeal committee’s decision suggests that identical language in one law may mean something different in another.

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“It has implications beyond this particular case,” Finance Department spokeswoman Sonia Lowe said in an email.

The finance ministry characterized the province’s appeal and the assessment authority’s appeal as complementary but distinct, saying the assessment authority’s role as a regulator is different from that of the government in as a legislator.

“There are different questions and questions of law that can apply,” Lowe said.

The decision could have implications for major property owners and developers who are also subject to AST while properties are under development. Tens of millions of dollars in taxes are potentially involved, a cost, developers say, that will be passed on to buyers or tenants if AST is imposed on projects under development.

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Paul Sullivan, a Vancouver-based property tax officer who coordinated Musqueam’s appeal and is involved in handling appeals for dozens of other properties, said he was disappointed the province was challenging the ruling of the appeals committee for evaluations. He said he believed this was the first time the province had taken such a step, as usually the assessment authority itself deals with such matters.

“In a province facing a chronic affordable housing problem, we should focus on solutions rather than wasting taxpayer time and resources in two departments simultaneously battling cuts in housing costs,” said Sullivan, a regional leader of global tax company Ryan LLC.

Musqueam Capital is developing an eight-hectare property in a multi-phased project with 1,200 housing units averaging 1,000 square feet each, including rental and affordable housing, as well as retail space, a center community and daycare.

The combined assessed value of the three plots where development is under construction is over $ 280 million, with most classified as residential. Musqueam Capital has already paid its regular property tax for the land, but has challenged the AST, which was first applied in 2019.

– With files from Postmedia News

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