Property Assessments (January 2019)

  18 January 2019

REMINDER: if you want to appeal, the deadline is January 31

NOTE: AEC Property Tax consultants is offering CHF BC members a break on their normal recovery rate and you still don’t pay for service if an appeal is unsuccessful. (See below for more information about contacting assessment consultants.)

Every year we try to get an overview of property values of non-profit housing co-ops. There are more than 260 co-ops of this kind in BC, but the number of properties is actually considerably larger. Some co-ops operate on multiple sites and may have several separate addresses for BC Assessment purposes, even if the co-op itself exists as a contiguous block. And some co-ops are partly or wholly stratified. For example, even though the First Avenue Athletes Village Housing Co-op has one building, it has 84 separate listings for assessment purposes*. We obtain information through management companies, directly from co-ops and from publicly available information from BC Assessment itself. We don’t get all the details, but we come close to capturing what’s going on in the sector.

We have much less information on property taxes. These are calculated from the assessed values, using differing rates for different municipalities. BC Assessment’s task is to determine value, not how much tax is to be charged on the properties. It has limited flexibility on how to classify properties. Although a low tax bill is usually welcome, it’s worth considering the immense value of the combined assets that the sector manages (and the potential borrowing power it offers). As of the beginning of 2019, non-profit housing co-ops offer housing to members using real estate assessed at more than $4.7 billion.

What happened last year?

Last year was interesting. Co-ops received assessment notices early in the year, but for about 15% of properties the final numbers changed over the course of appeal season. Sometimes co-ops launched appeals themselves, and in some cases there were external appeals related to a change in how BC Assessment should regard (some) leasehold properties. The end result was that about 42 co-ops saw decreases in their assessed value. These averaged 40%, and almost all were associated with co-ops with lease agreements with municipalities. One co-op that owned its land saw a similar degree of reassessment: it was able to successfully argue for a reduction (with the aid of an external consultant) because its property was subject to restrictive zoning.

What’s the current situation?

Take a look at the chart above which summarizes the changes for about 290 co-op properties. (The number reviewed is larger than the number of co-ops because some co-ops have multiple assessment addresses. Even so, a small number of co-ops are excluded from the counts.) The total, combined value of co-op properties increased by about 15%. More than 90% of co-op properties saw assessment increases: these averaged at about 17.5 % on a per property basis. More than 40% of co-op properties saw increases of 10-20% compared to the final figures for the preceding year.

Co-ops should remember that increases in assessed value do not translate directly into property tax increases. Only if your property value increases more than the average in your area will you see proportionally higher tax increases (compared to other property owners). And homeowner grants may have an offsetting effect. Appealing an assessment is an option, but you’ll need to take quick action to secure your right to appeal: the deadline is January 31.

Arguing against your assessment

There are three common avenues to appeal your assessment (beyond notifying BC Assessment of simple clerical mistakes)

  1. Your buildings may be worth less than BC Assessment thinks, due to needed building repairs and renewals. This is usually the easiest argument to make. In the past, co-ops with envelope issues or other serious maintenance problems have been able to argue for reductions. Co-ops generally need supporting engineering documents (e.g. building condition assessments) to make this kind of overvaluation claim. Remember, if your co-op has seen significant capital works over the last couple of years, relative increases in your assessed value should be expected.
  2. Legal restrictions on the use of the land can also reduce assessments. Many non-profit societies with BC Housing agreements have covenants on title which serve to lower the assessed value. Do you have a covenant on title? Or a land use restriction? Or is your co-op property subject to zoning that may lower its value? Maybe an agreement with a municipality that does the same thing? Very few co-ops have covenants on title, but there may be avenues to explore in this area.
  3. Sometimes BC Assessment just gets it wrong. Comparisons with other similar, nearby properties are the best way forward in these cases, and that takes some research.

Co-ops will sometimes make appeals on their own, sometimes with the assistance of management companies, and sometimes they seek help from professional consultants.  Although we are not making any recommendations, we know of a couple of firms that have worked with co-ops in the recent past: AEC (Vance Leschuk, tel: 604-629-5941, email: vleschuk@aecpropertytax.com) and Collingwood Appraisals Ltd. (Ed Landry, tel: 604-526-5000 xt. 225). There are others. Some firms will charge hourly rate fees for their services, others may seek compensation based on the size of the property tax reduction they are able to obtain for their clients (e.g. AEC). If your assessment has gone up significantly, you may want to appeal.

The BC Assessment website has information you’ll find helpful. However your co-op decides to proceed, please remember the deadline for filing an appeal is January 31, 2019.

* When we discuss properties, we combine the stratified units into a single block. So when we talk of a sample of 290 properties, all those Athletes Village homes are considered as one property address.

** If you like maps and statistics and live in Vancouver, this map from MountainMath.ca may also interest you.