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Provincial government preparing legislation to help Vancouver’s small business, arts sectors

Legislation would give cities the power to determine which organizations are faced with unwieldy tax increases
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The Courier counted 25 for lease signs along a 10-block strip in South Granville last fall, as several businesses closed or relocated because of untenable property tax rates.

The provincial government appears to moving on one of the single biggest killers of small business and the arts sector in Vancouver.

A news release issued Friday afternoon suggests legislation is forthcoming this spring that will allow municipalities to exempt a portion of the value of sections of commercial properties from taxation.

The proposed legislation would apply to the 2020 tax year and be in effect for a maximum of five years. It puts the onus on cities to decide which businesses and organizations will get relief among those that identify as paying overly high property taxes.

The news release very carefully states that the current model of highest and best use of assessing a property — which is used Canada-wide — is not being replaced with a split assessment model, or any other system.

“With this interim legislation, we are giving municipalities the tools they need to provide immediate property tax relief to targeted properties, for 2020, while we continue to work with stakeholders on a permanent province-wide fix,” housing minister Selina Robinson said in the news release.

Highest and best use allows for an underdeveloped piece of property to be taxed on its future development potential, rather than the property’s current use.

To put that system in perspective, picture a one-storey building located in a neighbourhood that allows zoning up to six storeys. Even though that plot of land has a one-storey building on it, it is taxed on the potential that it could one day be home to a six-storey structure and other development trends in the area.

Split assessment, on the other hand, would allow municipalities to set a lower tax rate on the air above that small businesses.

Business properties pay roughly four times more in tax than residential properties.

“[The legislation] is being designed to provide a way for municipalities with enough flexibility to provide tax exemptions to target specific businesses and non-profit organizations to support those most impacted by the current framework, without changing an already complex assessment system,” the province’s news release states.

The Courier has reported on dozens of local businesses and organizations that have gone belly up in recent years due to massive property tax increases.

Here’s an example of just a few:

South Granville business leave en masse

Vancouver garages are disappearing

East Vancouver venues struggle to keep up with rent

Beaumont Studios poised to close

Numerous businesses struggle amid colossal tax bills