BC Assessment is required to determine the “actual value” of land and improvements (i.e., property) in the Province. However, property taxes are levied on a property’s “taxable value”, not its actual value. “Taxable value” is a property’s actual value minus the value of any tax exemptions.
What is a tax exemption?
A tax exemption is a tool that reduces or eliminates liability to property tax. In a few unusual situations property may be exempt from assessment, in which case it is not included on the assessment roll. But more commonly, property is assessable (i.e., included on the roll) but exempt from property tax in whole or in part.
How do tax exemptions work?
Exemptions from property tax operate in a number of different ways. Exemptions may be whole or partial; that is, they may exempt all or only part of a property from taxes, or they may provide relief from all or only some property taxes. In all cases, specified criteria such as ownership, use, location, or property type, must be met before an exemption applies. In some cases, the discretion to grant or deny an exemption lies with the taxing jurisdiction.
Where do I look up tax exemptions?
The majority of property tax exemptions are contained in taxing statutes such as the Community Charter, the Vancouver Charter, the Local Government Act and the Taxation (Rural Area) Act. However, exemptions are also set out in more subject-specific legislation such as the School Act, the Health Authorities Act or the University Act.
Examples of exemptions providing full relief from property taxes
• Property owned by the federal or provincial government is fully exempt from property taxes for all purposes: section 125 of the Constitution Act.
• Property owned by a municipality is fully exempt from property taxes for all purposes: section 220(1)((b) of the Community Charter; and section 131(1) of the School Act.
Examples of exemptions providing partial relief from property taxes
• A farmer’s dwelling in a rural area is exempt from provincial general property taxes, but subject to school taxes: section 15(1)(f) of the Taxation (Rural Area) Act; and section 131(4)(a) of the School Act.
• Up to $10,000 of the assessed value of improvements in Class 4 – major industry, Class 5 – light industry and Class 6 – business and other is exempt from all property taxes: Industrial and Business Property Exemption Regulation, made under the Community Charter.
• 50% of the assessed value of a parcel of land in Class 9 – farm is exempt from school taxes: section 130(1)(a) of the School Act.
This web page is not intended to be a comprehensive guide on exemptions from property tax.
More information about property taxation and exemptions can also be found at the following provincial government links:
1) Municipalities - http://www.cscd.gov.bc.ca/lgd/finance/property_tax.htm
2) Rural areas - BC Government Website - Rural Area
Disclaimer: Where information presented is different from legislation, legislation shall prevail.