Under-assessed commercial properties costing millions in property tax revenue, says former appraiser

B.C. could be losing out on millions in property tax revenue due to commercial properties being under-assessed, according to a retired BC Assessment appraiser.

Derek Holloway, who was an appraiser for 28 years, says there are several commercial properties across the province that are assessed at millions of dollars less than their sale prices.

He gives an example of a property in Burnaby that sold for $145 million but was assessed at roughly half that.

“It’s a large, high profile property,” he said.

“And I took it to the appeal board, and they didn’t want to increase the assessment, so they kicked it up from the review panel to the appeal board, and that cost $300 a property to appeal, so I didn’t take any further, but BC assessment said that they contacted the participants of the sale that property, and they got no response.”

Holloway says that lack of response is not unusual, and that often when they would ask a property owner, realtor, or property manager for information, they wouldn’t get any information returned to them.

“It’s an offence under the Assessment Act to ignore BC Assessment, but if you do, there’s absolutely no consequences,” he said.

He says it would be difficult to estimate how much revenue is actually being lost to the under-assessments. There are 200 different taxing jurisdictions in the province, and they all have their own separate tax rates.

“But suffice to say that some of the largest properties in these communities are the ones that are under assessed, in all likelihood, because BC Assessment can’t get access to information that they need that’s critical to do proper assessments,” he said.

He goes on to say that if larger businesses don’t pay their proper share, the burden ends up falling to smaller property owners who aren’t able to challenge their assessments — which ultimately hurts everyone.

“Eventually, everybody cries to try to save the individual businesses and lower the tax burden, and that gets pushed onto the residential taxpayers,” he said.

“There’s a cascade effect.”

BC Assessment needs to ask the provincial government, through the Ministry of Finance, to change the Assessment Act and give it some “teeth” to compel property owners to provide requested information, he says.

As it stands, Holloway says there is no meaningful penalty to solve the issue.

With files from Michelle Meiklejohn and Cole Schisler.