B.C. super tax on new homes shot down
September 3, 2021
Lelem Living will include 1,200 homes. | Musqueam Capital Corp.
In what could be precedent for residential development in British Columbia, the Property Assessment Appeal Board has ruled the Additional School Tax (AST) being levied on a market and rental housing project in Vancouver by Musqueam Capital Corp. is “counterproductive” and should not apply.
Ryan Property tax experts Paul Sullivan and Ryan Tung, who quarterbacked the successful $2.2 million tax appeal with their legal team, welcomed the ruling’s finding that it would be “contrary to the objective of the AST if it is imposed while the housing is in the process of being developed.”
The AST is applied on the portion of the net taxable value of a dwelling property that exceeds $3 million. In 2008, the B.C. government transferred land ownership to the Musqueam Band. The properties, valued at nearly $300 million, are now undergoing construction as part of a 20-year phased residential and retail project that will deliver 1,200 condo and rental units on a 21-acre site. The August 25, 2021 Property Tax Appeal Board Decision noted “the development process is indispensable to the creation of residential properties that will then address the housing crisis.”
Sullivan points out that although builders and others in the building industry were always skeptical any of the new housing or vacancy taxes would increase affordability, they relied on then-Finance Minister Carole James’ March 13, 2018 statement: “The goal, through this school tax, is to identify the homes or the types of homes where owners have benefited the most from rising property values without having the tax fall on providers of rental housing, for example.”