Assignment 14 Local Government Law and Taxes on Real Property

Question 1

Who is NOT responsible, by statute, for the payment of real property taxes?

1. The life tenant of the property
2. The registered owner of an estate in fee simple
3. The registered holder of an agreement for sale
4. The residential tenant

Answer 1

Correct Answer: 4

Options (1), (2), and (3) are all definitions of an “owner” under the provisions of the Assessment Act (section 1) and are therefore all responsible for payment of real property taxes. A residential tenant is not responsible for payment of real property taxes.

Question 2

In British Columbia, most of the regulation regarding the use of private land comes from:

1. the local governments.
2. the provincial government.
3. the federal government.
4. both the provincial and federal governments.

Answer 2

Correct Answer: 1

Local governments have significant regulatory control over privately-owned land. In fact, local governments have more day-to-day impact on privately - owned land than both the provincial and the federal governments combined.

Question 3

Which of the following statements is TRUE regarding an appeal of a decision of the Property Assessment Review Panel?

1. An appeal to the British Columbia Supreme Court from the Property Assessment Appeal Board can only be heard on a point of law, not of fact.
2. An appeal can be made directly to the British Columbia Supreme Court from the Property Assessment Review Panel.
3. Only owners of assessed property can appeal a Property Assessment Review Panel decision.
4. Owners can appeal their property assessment as well as their property taxes.

Answer 3

Option (1) is true, and therefore is the correct answer. An appeal from the Property Assessment Appeal Board to the British Columbia Supreme Court can only be made on a point of law, not of fact. Option (2) is false because an appeal of a Property Assessment Review Panel decision must first be made to the Property Assessment Appeal Board before appealing to the British Columbia Supreme Court. Option (3) is false because any person, including a municipality, who is dissatisfied with the Panel’s decision, can appeal to the Property Assessment Appeal Board. Option (4) is false because property owners cannot appeal their property taxes. Owners can only appeal their property assessment.

Question 4

Which one of the following statements best describes the difference between an assessment notice and a tax notice?

1. A tax notice is a request for payment, while an assessment notice is not.
2. Both notices are requests for payment, but a tax notice also provides a breakdown of the tax systems.
3. Neither statement is a request for payment; they both inform the owner of the assessed value of the property.
4. An assessment notice is used to supplement the assessment roll.

Answer 4

Correct Answer: 1

The assessment notice notifies property owners of the assessor’s determination of actual assessed value of their property. A tax notice requests payment of taxes.

Question 5

Which of the following is NOT regulated by zoning bylaws?

1. Change in ownership or occupancy of a building, structure, or land
2. The size, design, and location of advertisement signs in a given area
3. The number of buildings permitted on a given parcel of property
4. The number of parking spaces required for a 10,000 seat auditorium

Answer 5

Correct Answer: 1

Changes of ownership or occupancy of a building, structure or land are not regulated by zoning bylaws. Generally speaking, zoning bylaws regulate the use of property, the location of buildings on the property and the form and shape of buildings on the property.

Question 6

Which of the following statements about exemptions and reliefs from property tax is TRUE?

1. The home owner grant is not a type of tax relief from property taxes.
2. The use of a property for a purpose other than that which it is zoned for will never result in a relief from property tax.
3. The granting of all exemptions and reliefs from property tax are left to the discretion of the local authorities.
4. Where property is owned by the Crown but occupied by a non-tax-exempt organization, property taxes must be paid.

Answer 6

Correct Answer: 4

Option (4) is correct because when property is owned by the Crown but occupied by a non-tax-exempt organization, property taxes must be paid. Option (1) is incorrect because the home owner grant is a type of tax relief from property taxes for an owner of an eligible property, if they occupy it as a principal residence. Option (2) is incorrect because certain residential properties can be assessed according to the value based solely on their current residential use, even if the property has been zoned for a higher use. Option (3) is incorrect because some of the exemptions are mandatory, while others are left to the discretion of local authorities.

Question 7

Sam wishes to purchase a 6-acre piece of farmland with the intention of developing it as a botanical tourist attraction and amusement park. The land is located in the agricultural land reserve. Which one of the following statements is TRUE?

1. Although the property is within the agricultural land reserve it may be used for this non-agricultural purpose without the need for Agricultural Land Commission approval because the land will not be irreparably removed from future agricultural use.
2. Sam should insert a condition precedent into his offer to ensure that the Agricultural Land Commission approves his intentions before he is committed to purchasing the property.
3. Sam should have the municipality agree to his subdividing the land into three two-acre parcels and thereby avoid the agricultural land reserve problem altogether.
4. Both (1) and (2) are true.

Answer 7

Correct Answer: 2

There is no way that Sam can get around the agricultural land reserve problem. He must obtain a partial exemption from the Act for his amusement park.

Question 8

Which of the following is NOT one of the usual three parts of a zoning bylaw?

1. The regulations applicable to each particular zoning district
2. An official community plan
3. An official map
4. General administrative and interpretation sections

Answer 8

Correct Answer: 2

Option (2) is correct because a municipality may, but is not obliged to, adopt an official community plan by bylaw; however, it is neither a zoning bylaw nor one of the usual three parts of a zoning bylaw. Options (1), (3), and (4) are incorrect because zoning bylaws usually consist of three parts: regulations applicable to each particular zoning district, such as what uses are permitted; the official map which shows the location of each zone; and general administrative and interpretation sections applicable to all or most zoning districts.

Question 9

Your friend Laurie is complaining about her property taxes. Laurie is a single 63-year old Canadian citizen, who is neither handicapped nor a war veteran. She has lived in British Columbia for more than the past year and is the owner-occupier of a house located in the City of Vancouver that is assessed at $430,000 and qualifies as an “eligible residence” as defined in the Home Owner Grant Act. There are no financial encumbrances on her house and her property tax liability for this year is $1,900. Given the above information, what property tax relief can Laurie expect?

1. Laurie can claim a home owner grant of $845 and is eligible to apply for tax deferment under the regular program.
2. Laurie can claim a home owner grant of $170 and is eligible to apply for tax deferment under the regular program.
3. Laurie can claim a home owner grant of $570, but is not eligible to apply for tax deferment under the regular program.
4. Laurie can claim a home owner grant of $570 and is eligible to apply for tax deferment under the regular program.

Answer 9

Correct Answer: 4

Laurie qualifies for a $570 home owner grant, but she does not qualify for the $845 grant (she is not 65 years old, handicapped, or a war veteran). However, since Laurie is over 55 years old, she is eligible to apply for tax deferment.

Question 10

Which of the following is NOT an example of an exempt supply of real property as set out in the Excise Tax Act?

1. A long-term lease agreement
2. A ground lease agreement for a term of 6 months
3. The sale of a residential single family detached home in Kelowna that has been occupied for 30 years
4. The sale of a strata lot that has yet to be occupied as a place of residence by its three previous owners

Answer 10

Correct Answer: 4

Option (4) is correct because the sale of a residential property that has yet to be occupied is considered a taxable supply of real property as set out in the Excise Tax Act.
Option (1) is incorrect because a long-term lease agreement is an example of an exempt supply of real property as set out in the Excise Tax Act.
Option (2) is incorrect because a ground lease agreement is an example of an exempt supply of real property as set out in the Excise Tax Act.
Option (3) is incorrect because the sale of a used residential property that has been previously occupied is an example of an exempt supply of real property as set out in the Excise Tax Act.

Question 11

Amrit has built a home in Victoria, which has yet to be occupied as a place of residence. He decides to move to Montreal for a few years and rents out the home for a 3-year term to a friend of his to live in while Amrit is out of the city. Which of the following statements regarding the tax status of the home is correct?

1. The move-in by the long term tenant triggered the self-supply rule and GST is owed by Amrit on the property.
2. Amrit has not triggered the self-supply rule because he has not yet moved into the home and therefore does not owe GST until the property is sold to a third party.
3. Amrit triggered the self-supply rule under the Excise Tax Act. He owes GST on the property and will also be responsible for collecting and remitting GST upon sale of the property.
4. GST will be owed only if Amrit gives the renter the option to purchase the property outright.

Answer 11

Correct Answer: 1

Option (1) is correct and option (2) is incorrect because the self-supply rule not only applies when the builder moves into the home they have built but also when the builder rents out the home to a long-term tenant prior to a sale. Amrit owes GST but he can probably recover GST paid on the construction costs through an input tax credit or non-registrant rebate.
Option (3) is incorrect because if the self-supply rule is triggered, GST is owed immediately and not owed again once the property is sold.
Option (4) is incorrect because the option to purchase the property does not affect whether Amrit owes GST. The move-in by the long term tenant triggered the self-supply rule and therefore Amrit owes GST immediately.

Question 12

Some real property may have an actual value for real property taxation purposes which is lower than market value because:

1. the property is owned by a non-profit organization.
2. a statute provides that it is assessed based on current use.
3. the owners qualify for tax deferment.
4. the property has been lived in continuously for 5 years.

Answer 12

Correct Answer: 2

Option (2) is correct because section 19(8) of the Assessment Act states that the actual value of certain residential properties may be based only on current use. If the resident-owner of a property has lived continuously in the residence for ten years, the resident-owner has made applications with the assessor each year, and the property has been zoned for a higher use or influenced by other non-residential uses of adjoining properties, the actual value for property taxation purposes may be based on current use, which may be lower than market value. Option (1) is incorrect because the nature of the owner has no bearing on the value of the land for taxation purposes although it may be relevant for tax exemptions. Option (3) is incorrect because when home owners qualify for tax deferments, they obtain a reduction in their net property taxes. However, this has no impact on actual value of the property.
Option (4) is incorrect because the fact that a property has been lived in continuously for 5 years does not change the value of real property for taxation purposes.

Question 13

Which of the following statements about improvement districts is FALSE?

1. Improvement districts are established by the provincial government following a petition by the residents of the area involved.
2. Improvement districts are limited to rural areas only.
3. Improvement districts are governed by elected trustees who may pass bylaws to carry out the district’s objectives.
4. The main powers of improvement districts relate to the construction, operation or maintenance of utilities in rural areas.

Answer 13

Correct Answer: 2

Option (2) is correct because the boundaries of an improvement district may include areas within a municipality. Although improvement districts are generally located in rural areas, this is not necessarily the case. Options (1), (3), and (4) are incorrect because they are all true statements.

Question 14

Which one of the following properties would NOT qualify for a property tax exemption?

1. A local high school
2. A privately owned ski-lift facility operated on Crown land
3. Churches and other public places of worship
4. The Surrey Municipal Hall

Answer 14

Correct Answer: 2

Crown land is generally tax exempt. However, a private company is not a tax exempt organization, and if it is operating on Crown land it will be required to pay real property taxes. Thus, Option (2) will not qualify for a property tax exemption because it is a privately owned facility.

Question 15

Bert recently proposed a subdivision plan which was accepted by the approving officer. Bert is anxious to find out what may be required of him under subdivision bylaws. Which of the following requirements or regulations could NOT be imposed on a subdivider such as Bert?

1. The requirement to provide roads and street lighting
2. The requirement to set aside land for a park or school
3. A building scheme for the residences to be built in the subdivision
4. The duty to protect riverbanks within the subdivision from development

Answer 15

Correct Answer: 3

Subdividers of land may be subjected to a number of requirements and regulations. A building scheme is not one of those regulations, but rather a method used by developers themselves to maintain aesthetic uniformity in a new housing development.

Question 16

You own a house in Nanaimo and owe $1,134.82 for general taxes. If Nanaimo’s general tax mill rate is 4.829, what is the net taxable value of your house? Round your answer to the nearest $100.

1. $235,000
2. $548,000
3. $54,800
4. $23,500

Answer 16

Correct Answer: 1

Net taxable value is calculated by dividing the gross taxes given for the general tax by the general tax rate (in thousands). The net taxable value is $235,001.04, which is rounded to $235,000.

Question 17

Tussaud bought a large piece of property in the Vancouver area on which she constructed a wax museum. The area was subsequently rezoned to residential use. What will most likely be the new status of Tussaud’s tourist attraction?

1. Under the new zoning bylaw, the museum will be deemed an illegal use of land and Tussaud will be forced to shut it down.
2. The museum may continue operation as a legal non-conforming use of the land, but only while owned by the original owner, Tussaud.
3. The museum may continue operation as a legal non-conforming use, but may lose this status if it shuts down for more than 90 days.
4. Tussaud will only be able to continue operation of the tourist attraction in this area if she applies for and is granted a development variance permit.

Answer 17

Correct Answer: 3

Option (1) is incorrect because zoning bylaws cannot be retroactive. Option (2) is incorrect because the status of legal non‑conforming use of land may continue through successive changes in ownership. Option (3) is correct because the status of non‑conforming use will be lost if the use is discontinued for more than six months (90 days in Vancouver), unless the discontinuance is part of normal seasonal or agricultural practice. Option 4 is incorrect because a development variance permit cannot vary the land use provisions in any bylaw.

Question 18

Which of the following is NOT a type of bylaw enacted by local governments?

1. Zoning bylaws
2. Strata bylaws
3. Building bylaws
4. Subdivision bylaws

Answer 18

Correct Answer: 2

Strata bylaws are enacted by strata corporations rather than local governments.

Question 19

Which of the following is NOT an example of a legal non-conforming use?

1. Elizabeth has just purchased a corner grocery store from Tom, who had owned it for 5 years. Last year the zoning was changed from commercial to residential.
2. Della operated a law office in 25% of a building located in an area which has just been rezoned from commercial to residential. Della’s practice is booming and she has expanded her office to occupy 50% of the building.
3. Mizuho runs a deli in an area which was last year rezoned from commercial to residential. To accommodate her expanding catering business she has just constructed a 400 square foot addition off the back of the building.
4. Gina runs a souvenir shop in Whistler, which she closes every year for three months from early September to late November. The zoning has been changed from commercial to residential.

Answer 19

Correct Answer: 3

Option (3) is correct because an addition to a building cannot be used for a non-conforming use unless it is required by law or permitted by a board of variance. Option (1) is incorrect because a non-conforming use may continue through successive changes in ownership. Option (2) is incorrect because a non-conforming use in part of a building may be extended throughout an existing building. Option (4) is incorrect because a non-conforming use loses its status if the use is discontinued for a continuous period of six months (or 90 days in Vancouver), and since Gina’s closure is only for three months and is not in Vancouver, it will be permitted to continue as a legal non-conforming use.

Question 20

Which of the following statements is FALSE?

1. Valuation of real property for property taxation purposes is done annually.
2. In the regular deferral program, a minimum of 25% equity in your home is required to qualify, whereas in the families with children program, only 15% equity is required.
3. For property tax purposes, an important consideration when assessing the value of improvements such as pipelines and utility cables is the selling price of those improvements in the open marketplace.
4. For property taxation purposes, a given tax rate applies with respect to each $1,000 of net taxable value.

Answer 20

Correct Answer: 3

Option (3) is false, and therefore is the correct answer. Statutes provide for special assessment of utility and industrial land improvements because of the absence of market evidence on which to determine actual value. Option (1) is true because valuation of real property for property taxation purposes is done annually. Option (2) is true because in the regular deferral program, a minimum of 25% equity in your home is required to qualify, whereas in the families with children program, only 15% equity is required. Option (4) is true because for property taxation purposes, a given tax rate is applied to every $1000 of assessed value of the property, less any exemptions that apply. This is called the mill rate.