Coquitlam city hall took a $1.8-million hit last year — and a $820,000 loss the year before — in property tax refunds.
Now, it will rally the rest of the province at upcoming municipal conferences to have BC Assessment’s appeal framework and process reviewed.
Monday, council heard from Michelle Hunt, Coquitlam’s general manager of finance, lands and police, about the trend by local landowners to appeal their assessments in order to reduce their municipal property bill.
Property taxes, which form most of the city’s revenue, are tied to land values determined by BC Assessment on July 1 of the previous year.
Hunt said the $1.8-million impact to the city’s bottom line last year is worrying — especially as the municipality struggles financially with the pandemic.
“It would be an understatement for me to say that 2020 came with a variety of financial challenges,” Hunt said. “One [that] I did not anticipate was the amount of tax refunds we would be providing due to property assessment appeals.”
According to her report, the businesses and organizations that received the biggest tax refunds from Coquitlam last year, following successful appeals with BC Assessment, were:
• Metro Vancouver Housing Corp.: $403,000
• Anthem Properties Corp.: $297,000
• Stella-Jones Inc.: $220,000
• Choice Properties REIT: $178,000
• Morguard Investments Ltd.: $140,000
• BentallGreenOak Canada: $100,000
• South Coast B.C. Transportation Authority: $89,000
• Wesbild Holdings Ltd.: $82,000
• Burquitlam Co-operative Housing: $58,000
Traditionally, she said, council sets aside $150,000 a year for property tax refunds and, until 2019, “we were well within those budgets,” she said, noting many of the recent refunds are for multi-year settlements and “we still have a number of outstanding” appeals.
Last December, seeing the refunds spike, council earmarked $250,000 and agreed to keep a $1-million balance in the tax appeal reserve for future settlements.
Hunt said residential property owners who want to reduce their property tax burden make up the biggest group successfully challenging BC Assessment, after the notices are mailed out in early January. For commercial owners, most are represented by an agent at the appeals stage.
OFF TO UBCM
City council voted 8-1 (with Coun. Bonita Zarrillo opposing) for Hunt’s recommendation to have a review of the agency’s appeal framework and process — a resolution that will go before the Lower Mainland Local Government Association for referral to the Union of BC Municipalities, at its annual convention.
Last month, BC Assessment officials spoke via Zoom to council about their lack of resources, and the rise in appeals over the past few years.
For Coquitlam and other Metro Vancouver municipalities, assessment challenges can be based on new neighbourhood master plans that show development potential. Other reasons include development timelines; restrictive covenants (including affordable housing policies); and over-valuations or misclassifications in assessment values.
Mayor Richard Stewart was blunt with his comments, saying the refunds result in tax hikes. And he called on Coquitlam land owners to contact city hall if they want to change the official community plan because they don’t plan to develop their property, thus reducing the valuation and subsequent taxes.
Stewart also took aim at the Metro Vancouver Housing Corp. for their large number of appeals, which he said he voted against when it came before the Metro Vancouver board. “It’s unfair to the rest of the region,” he said, adding, “It does frustrate me that the residents of Coquitlam have their taxes go up to subsidize the Metro Vancouver Housing Corporation.”
Coun. Zarrillo said BC Assessment only looks at the current and future market values and it doesn’t take into consideration the social aspects, while Coun. Dennis Marsden said the provincial government needs to find a fairer way for tax distribution so cities aren’t left with a hefty bill.
Last year, Port Coquitlam refunded $346,387 in property taxes versus $254,409 in 2019; in Port Moody, the city refunded $264,160 in property taxes compared with $126,176 the year earlier.
Meanwhile, in a statement to the Tri-City News, Bryan Murao, BC Assessment's deputy assessor, wrote the Property Assessment Appeal Board (PAAB) operates independently from BC Assessment, and it has no control over its decisions.
He also noted the stability of the assessment roll: Less than 2% of all properties are appealed annually and, on average, less than one-third of 1% of taxes collected are refunded by the taxing jurisdictions.
"BC Assessment greatly values our relationships with local governments and strives to share our property information with all taxing authorities in a timely and meaningful manner – including information in support of assessment roll stability," Murao wrote. "There are several mechanisms in place to help provide roll stability to local government stakeholders such as pre-roll consultation. Pre-roll consultation is an opportunity for property owners (or their agent) to exchange information and dialogue with BC Assessment prior to the release of the assessment o=roll in January. This information can be shared further with local governments in consideration of any potential risks to the roll."
Number of BC Assessment (PAAB) appeals for Coquitlam properties:
• 2016: 57 (17 residential, 40 commercial)
• 2017: 64 (27 residential, 37 commercial)
• 2018: 116 (38 residential, 68 commercial)
• 2019: 314 (199 residential, 101 commercial)
• 2020: 265 (172 residential, 86 commercial)