A group of Richmond property owners has launched a campaign to reassess property taxes amid uncertainty. Cowichan Court decision.
“Frankly, I think it would be difficult to argue that this decision had no impact on the value of these properties,” Paul Sullivan, principal and practice leader of Canadian advocacy and tax policy at Ryan Tax Firm, told Global News.
“And since value is used to collect property taxes, it would be fair for us as tax preparers to represent as many of them as possible in a bulk property tax appeal and at least do something for them by lowering their property taxes through a value appeal.”
The federal and provincial governments will appeal the British Columbia Supreme Court's decision in favor of the Quwutsun people, or Cowichan Nationwhich found that it had “established Aboriginal title” to more than 5.7 square kilometers of land on the Fraser River in Richmond, south of Vancouver.
The city of Richmond also joined the call.
“I think a lot of people are a little unsure about exactly what happened to their property rights, and I think we can accept that, but all properties are always valued on a risk basis, and so risk is the first factor in determining how we value a property and whether it's a rental property or whether it's a redevelopment site,” Sullivan said.
“Confidence in the future capabilities of a property speaks to risk, and when risk increases, value falls, and can we concretely prove the impact of the situation today, perhaps not, but the risk has increased dramatically.”
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The bookmaker's annual valuation includes the sales valuation ratio (ASR), which This is an indicator of how close the appraisal of the property being sold is to the market value..
“So the difficulty we're facing right now is I don't think this property can be sold,” Sullivan said.
“The value is unknown at this time. We need to quantify the risk that was placed on these assets as a result of this decision and then match that with the valuation.”
Most of the properties in the 5.7 square kilometer area are commercial and industrial, but there are approximately 150 residential properties.
Sullivan said they will be reaching out to all those affected.
“Taxation in British Columbia is very high right now,” he said.
“With the additional school tax over $3 million, residential tax rates aren't that far off from commercial tax rates anymore. You know, if you have vacant land, you're probably also dealing with speculation and a vacancy tax. So, all of these things are based on assessed value, and it doesn't seem fair that people have to pay the same level of taxes when they don't even know what their property rights are.”
Aboriginal title gives Indigenous peoples the right to territory never ceded by their ancestors, allowing Indigenous jurisdictions to use the land as they see fit. Courts have repeatedly confirmed that it is protected by the constitution, including in British Columbia.
The controversial issue in the Cowichan case is whether Aboriginal title replaces so-called fee simple title (the term used for private ownership of land) or whether the two can co-exist.
Both the court's decision and the Cowichans themselves stated that the plaintiffs did not seek to invalidate the fee simple titles, but that they wanted the government-owned lands returned to them.
Any private property would only be affected after it was sold, Indigenous lawyers said, although it remains unclear what impact that might have on future sales of those properties. However, the ruling declared common titles held by the Crown and City of Richmond to be invalid under Aboriginal titles, leading to general confusion.
Sullivan said he's not suggesting that affected Richmond property owners shouldn't pay property taxes, but owners could get a break because their properties are potentially not as valuable.
“You have to pay the proper taxes,” he said. “The question is how much should you pay? What's fair? There are other mechanisms that could, the city of Richmond could actually provide property tax relief. They are statutory. They are available under provincial legislation, but we heard (Richmond Mayor Malcolm) Brodie say last week that he's not interested. So if we're talking about property tax relief, the only path for owners is to appeal their assessed value.”
The court case is being appealed at all levels of government, as well as in Cowichan, and could take years to resolve. The province is seeking a stay of the decision until the appeal court hears the case.
“But uncertainty, I recognize, is a serious issue and we need to resolve it as quickly as possible,” British Columbia Premier David Eby said Monday.
“That is why we are accelerating our work in the Court of Appeal to be able to move to the next step.”
The City of Richmond and the British Columbia government are asking property owners to document any impacts on value and potential sales to speed up the appeals process.
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