Tax Relief for Small Businesses, Non-Profits, Arts and Culture Groups

Victoria – A new Interim Business Property Tax Relief program will allow local governments to provide immediate property tax relief for the 2020 tax year.

This relief will apply to small businesses and non-profits, as well as arts and culture organizations, that are struggling with high lease costs as a result of years of rapidly increasing property values.

Key elements of Interim Business Property Tax Relief program

The Interim Business Property Tax Relief legislation sets standard requirements that all local governments implementing it should meet, while offering significant flexibility to tailor their approach beyond these basic requirements.

This basic framework requires a property to be assessed in a commercial class – Class 5 (Light Industry), Class 6 (Business and Other) or a combination of the two – and have at least one tenant responsible for all or a portion of the property taxes to qualify for the exemption.

Local governments that choose to use the legislation will need to pass a bylaw to set further parameters to identify properties where the taxes have increased significantly due to a spike in land value in their communities. Those parameters include:

  • a base tax year of 2015 or later to use as comparison to the current taxation year. For example, a municipality where property values began to spike in 2017 could choose 2016 as the base year.
  • a minimum percentage of increase in commercial land value since the chosen base year. For example, a municipality can determine that the land value of the commercial portion of the property (Class 5/6) for 2020 must be 50% higher than it was in a 2016 base year to qualify;
  • a minimum percentage of the total property value that must be land value. For example, a municipality can require that in order to qualify for the exemption, 80% of the property’s total assessed value must be the value of the land (not the building); and
  • the percentage of the exemption by property, area or kind. For example, a municipality can decide that eligible properties in neighbourhood B will receive a 10% exemption on the commercial portion (Class 5/6) of the property.

To support local governments wanting to implement this tool this year, the Province has extended the deadline for when communities must have their bylaw passed to April 22, rather than March 31, 2020, and is providing them with staff advice, a model bylaw and a user guide.

Municipalities will be required to publish the public notice of the bylaw only once, instead of twice. Third reading and adoption of the bylaw can happen on the same day.

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