The Garibaldi Village Shopping Centre, in Squamish, B.C.Supplied
As residential property owners across Metro Vancouver face mounting tax increases this year, some are protesting that some owners of large commercial properties may not be paying their fair share of taxes.
In Squamish, the Garibaldi Village Shopping Centre on Glenalder Place was assessed at $11.68-million in 2021. It sold the next year for $22.5-million. It was then assessed that year for $13.346-million and in 2023 for $15.935-million. In 2024 it was assessed at a little less; at $15.529-million. For 2025, the assessed value is $17.38-million.
Assessed values are used by local governments to determine taxes that property owners pay. The sale price and assessed value discrepancy caught the attention of Squamish councillor John French, who believes there are other properties that are assessed too low. Mr. French tried to put forward a resolution last year to the Lower Mainland Local Government Association, asking the province to update its legislation and change the way properties are assessed, but did not succeed.
Meanwhile, Mr. French is concerned that residential property owners are picking up the shortfall in taxes on behalf of some industrial, commercial and investment properties. ICI properties include office towers and multifamily residential buildings.
“I feel this is a really big issue, especially for people like seniors and people on fixed incomes who own their own homes, because it’s really unfair to those people. They are basically subsidizing the ICI sector and specific properties that are undervalued according to the market, because that money needs to be made up somewhere. Communities have an amount of money that they need to tax to receive from their communities and if an ICI property is paying less than it should, it’s generally residential property taxpayers that are making up the difference,” said Mr. French.
“We all set our own mill rates, and some communities tax the commercial sector more heavily than residential. And in the case of Squamish, residential taxpayers carry a significant amount of the tax burden in comparison to commercial.”
Taxes, he said, are rising largely due to growth and dated infrastructure. It’s a common refrain across the province.
“The amount of property tax the district of Squamish is expecting to collect next year is an increase year-over-year of 12.87 per cent. The following year is more than 11 per cent, and this year the budget we just approved was more than 8 per cent.
“Traditionally those percentage increases have been 6 per cent and lower on an annual basis, with most of them being towards 4 per cent. Those are mind boggling increases,” he said.
For the past five years, retired BC Assessment appraiser Derek Holloway has been waving a red flag that there are large ICI properties that he believes are undervalued.
“I wish my house was assessed at 70 per cent of its market value,” Mr. Holloway said, in reference to the Garibaldi Shopping Center assessment-to-sale ratio.
“Since the 2022 sale, this submarket of real estate – well located local shopping plazas – has been the hottest of all real estate genres,” he said. “The value didn’t go down since 2022.”
Former Burnaby councillor Colleen Jordan, who sat on council for 20 years and left in 2022, said that there have been attempts over the years to overhaul the system, but the political will is not there to fix it. She said that once the city receives advance assessments for the year, they then determine the tax rate for residences and commercial properties, as part of the budget.
“At least in Burnaby, a huge number of potential development sites have had their assessed value reduced by between 15 and 25 per cent. As these are very expensive properties, such a reduction will have a big impact on the city’s revenue. I found enough properties that quite easily could contribute to a $5-million dollar loss compared to last year for Burnaby.”
Mr. French believes that big institutional investors and family offices that own many of the larger properties have the means to challenge assessments, unlike residential property owners.
“Individuals or corporations that own large ICI properties tend to have access to capital and the ability to pay lobbyists and lawyers, and that just doesn’t exist for most residential property owners,” said Mr. French. “So, it’s easy for them to push back and fight and keep their assessments low.”
Mr. Holloway said that part of the problem is that BC Assessment lacks the resources, and there is a lack of transparency around a property’s true value that would help BCA give accurate assessments.
“Although the [Assessment] Act says it’s an offence to not respond to BCA’s information requests, everyone within the system knows there are no consequences,” said Mr. Holloway, who was with BCA for 28 years.
“BCA appraisers are often in the dark about much of what goes on in the market, but especially so for large high-profile properties.”
In an e-mail, the Ministry of Finance responded that appraisals of large commercial sites are often complicated, involving not just comparable sales, but location, zoning, rental income, physical condition and redevelopment costs. Those are factors that affect an assessed value.
“Commercial property assessments are updated each year to reflect the changing real estate market conditions as of July 1 and any specific changes to a property as of Oct. 31. After these dates, in a continually changing market, it is not unusual for sales prices of properties to differ from their assessment values,” said the Ministry.
Paul Sullivan is a regional leader for Ryan ULC, a large American-based international tax services company. He represents major landowners and despite what the councillors are saying, he argues that residential property owners are not picking up any tax shortfalls from the commercial sector.
“The value of the [ICI] properties does not affect the amount of taxes the city collects, period,” he said.
“[Local governments] already know how much the budget is being allocated to residential. They just need to change the tax rate and recover that amount. So that is either a political statement or it’s just a factually incorrect statement. It is absolutely not the case, and I hear it quite often and it’s just wrong.”
With his help, major institutional owners negotiate their assessed values several months before BCA sends out assessments, he said. It’s a voluntary process, and as a result, there are fewer appeals.
He said a lot of the properties considered undervalued are based on land value.
“I’ve been appraising properties for 30 years. Land is the most difficult thing to value because you don’t always know when you’re going into big deals what you’re going to end up with. Am I going to get one tower? Am I going to get three towers? Is the site contaminated?”
As to lack of transparency around land transactions, he said public sector appraisers need to do the work to find the answers.
“You’ve got to look in the mirror a little bit sometimes about the quality of work that you’re doing and ask whether you’re doing as good a job as the private sector is because you’ve got the same tools. It’s a phone call. It’s an e-mail.
“I’m afraid that they need to do more thorough work if they want to get the same answers.”