Understanding the downtown tax incentives
An article titled ‘100 per cent tax exemption proposed for downtown’ that appeared in the Wed., July 10 edition of the Mirror should be clarified in order to get a better understanding of how the changes to the city’s downtown tax exemption bylaw, which council is considering, will work.
The changes are focused around two downtown areas: a general taxation area and a Special Commercial Area.
The general taxation exemption area runs from near 6th Avenue to the south to Robert’s Reach to the north in between Highway 19A and Dogwood Street. The Special Commercial Area captures the area in and around the St. Ann’s block which includes a portion of Alder Street, Dubeau and Beech streets, where the downtown revitalization project is currently underway.
In the general area, the changes would bump commercial developments up to a tax exemption of 100 per cent over five years, up from 50 per cent over three years, which would put commercial developments in line with multi-family developments.
In the Special Commercial Area, the only changes would be to bump LEED (Leadership in Energy and Environmental Design) standard gold or platinum residential or commercial projects up to a 100 per cent, seven-year tax exemption, up from the current five-year tax break.
The benefit to property owners is that they are exempt from paying that portion of increased value resulting from improvements as determined by BC Assessment. Instead, they would continue paying the same tax rate as prior to the improvements.
Ross Blackwell, the city’s land use manager, said developers would still pay taxes but would be exempt from paying that portion that has increased above the base amount for five years.
For example, if a building worth $200,000 is renovated, which increases the value of the building to $3 million, under the current incentive program the building would receive a tax exemption worth $17,383 over three years.
With the changes council is considering the incentive would jump to $34,766 over five years.