TAX NEWS - June 2010

Vancouver Tax: Lake Cowichan Council considers major tax shift

Vancouver Lake Cowichan town council considered a major local tax shift during their June 8 Sustainable Planning and Development Committee meeting, wherein they would tax landowners not for the value of their home or business, but the value of their land.

"Basically what you're doing is shifting the burden to the land," Lake Cowichan's chief administrative officer Joe Fernandez said. "You still collect the same amount of taxes, it's just shifted."

Fernandez brought up this option for councillors to consider in light of recent attempts by council to clean up unsightly properties in town.

With the difficulty it takes to get some property owners to clean up their properties, Fernandez suggested that if the financial penalty of taxation were lifted for those making upgrades to their properties, more people would do so.

Councillor Bob Day expressed his concern that this blanket tax rate would rush some land owners into development of their land before they're ready to do so. This would come as a reaction to the fact that they'd be taxed the same for their property regardless of whether or not there's development on it.

Fernandez responded by admitting the validity of Day's concern.

"I think the intention was to fix up derelict properties. I'm sure we're not the only municipality with that problem," councillor Tim McGonigle said. "To be taxed on the true value of the land is how it should be done."

This tax shift, Fernandez said, could force some commercial land owners to develop or rent out their properties, as it will now cost more to own vacant, potentially derelict properties.

"There's a fair bit of commercial land that's vacant or unused," Fernandez said. "You can make improvements without the side effect of higher taxes."

McGonigle backed up this sentiment.

"It's to alleviate some unsightliness in the downtown core," he said.

Lake Cowichan's pervious council last approved this tax shift in 2006, but couldn't get it through the Union of British Columbia Municipalities. Council decided during their June 8 meeting to give another shot.