When you own or lease a commercial property in BC, an annual property tax must be paid for each property. The condition of the economy both provincially and municipality and real estate market movement can cause a fluctuation tax bill.
Property Tax pays for our essential municipal services, regional services, transit, schools and policing. Your municipality provides essential local and regional services and property taxation is the main source of revenue. Municipalities may levy taxes for their own needs but as well on behalf of other public authorities such as hospitals. Any budget increases by the council could then increase in the municipal tax rate to generate more income. In May of every year, every BC municipality releases a tax rate for every type of property. Commercial property tax can either fall under 04, 05 or 06 class and each can have a different tax rate.
In the year 2020, the BC government gave a subsidy as a response to covid economic recovery for class 05 and 06 properties which reduced the tax rate for the school tax. The school tax made headlines in2021 when property owners were shocked to see no change in their assessment but a significant change in their property tax bill. This was all explained when we recalled that in 2020, owners had a subsidy.
For many owners, we saw that property values barely changed in value in 2021 above the average increase. As it seemed that the assessments were left at bay due to the pandemic and situation of our post-covid economy. Businesses were recovering from an inconsistent year, grappling with changes and transitions and some suffered huge losses. Going forward in 2022, most businesses have recovered, and e-commerce and warehousing have become high demand properties, with historically low vacancies for warehouses and offices
Our guess is as good as anyone's. But as we see historic record-breaking sales taking place throughout BC. It's safe to say that an increase in your 2022 commercial property assessment is possible. And depending on your municipal tax rates in 2022, a decrease or increase in your tax bill could as well occur.
Curious to learn more or learn about your property’s valuation? Contact Sidco Property Consultants.
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