A Burnaby city councillor says the provincial property value appeals process is unfairly benefiting commercial property owners, as the city grapples with $3.2 million in property tax refunds.
Property taxes are calculated as a percentage of property values, meaning a successful appeal to BC Assessment, dropping the property value, can lead to a refund in property taxes.
Between 2016 and 2019, the city has needed to repay anywhere between $268,000 and $2 million, but the refunds this year amount to $3.2 million – and that’s just from the first nine months of the year. Of that, nearly $2.8 million are coming from appeals from years prior that have just now reached a decision.
Coun. Colleen Jordan said she was “in a state of shock” after reading a staff report on the matter, to which Coun. Pietro Calendino replied that she was “not the only one.”
“For every $2.5 million, that’s another 1% increase in property taxes,” Jordan said.
Appeal cases, according to City of Burnaby staff, mostly do result in an amendment to the assessment, including a change in assessment classification, or an increase or decrease in assessed values, with most appeals resulting in a property value reduction.
City staff listed the top-10 appeal outcomes and their effects on Burnaby properties, and every one of them was a corporate property owner, with the top-two being malls.
The single highest refund was to the Lougheed Mall Holding Corp., which included a $247-million property value assessment change, along with a change in the property classification. Combined, the decision left the city with a refund bill of $1.3 million for its property at 9855 Austin Rd. – the City of Lougheed mall.
A numbered company – 0862223 BC LTD – similarly received an assessment change of $81.9 million for a property at 4501 Lougheed Highway – the Amazing Brentwood mall.
“Fundamentally, something’s wrong,” Jordan said.
She added the business community doesn’t even have to go through the trouble of the politics of property tax policies.
“We used to have a lot of business community, etc., come forward and say, ‘Oh, we’re too highly taxed. We’re too highly taxed.’ … Now they just go and appeal their assessment, and they get 10, 20, 30% reduction in their taxes,” Jordan said.
“Now that … is transferred onto everybody else’s tax bill, because somebody has to pay it. So the level playing field is starting to tilt really in the wrong direction.”
Jordan noted the number of appeals have gone up, resulting in an increase in refunds being owed to property owners and a backlog in potential refunds.
Currently, ongoing property value appeals in Burnaby date as far back as 2015, according to the staff report, and appeals from 2019 alone could result in a $2.5-million hit to the city’s taxes. Another $1.4 million is at risk from the first six months of this year.
In total, the city is at risk of having to pay back $4.6 million in property taxes.
And it isn’t just the city that is affected by the issue. According to the staff report, the province is similarly at risk of having to pay $3.6 million in refunds with the current backlog.
Coun. Sav Dhaliwal defended property owners’ right to appeal their property values, but he also said the province needs to do something to address the backlog of appeals.
“It stacks up,” he said. “It’s not fair for the city.”
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