Chapter 19 - Taxes on Real Property Flashcards
Taxes on Real Property
The actual value as of July 1, ______ becomes the tax base for 2013 property taxes.
(1) 2012
(2) 2013
The actual value as of July 1, ______ becomes the tax base for 2013 property taxes.
Answer:
(1) 2012
Fair market value is the amount that would have been paid for a property had it been sold in an open market by a willing buyer free of any mortgage or other charge.
(1) True
(2) False
Answer:
(1) True. The definition of fair market value is that it is the amount that would have been paid for a property had it been sold in an open market by a willing buyer free of any mortgage or other charge.
When are property assessment notices mailed to owners of real property?
Answer:
Property assessment notices are mailed to owners of real property on December 31.
Which of the following classes of property are granted full or partial exemption from taxation?
(1) Provincial Crown land
(2) Private forest land
(3) Cemetaries
(4) Rural residential areas
Answer:
(1) Provincial Crown land, (2) private forest land, and (3) cemeteries are all eligible for either full or partial exemption from taxation. Rural residential areas are not exempt from taxation.
The two general categories of taxable property in British Columbia are ___________ and _________.
Answer:
The two general categories of taxable property in British Columbia are land and improvements.
Taxable value is:
(1) equal to the sale price of a property.
(2) a value, in hundreds of dollars, that when multiplied by the tax rate, equals the amount of real property taxes payable.
(3) equal to the actual value as determined by the assessor.
(4) both (2) and (3).
Taxable value is:
(1) equal to the sale price of a property.
(2) a value, in hundreds of dollars, that when multiplied by the tax rate, equals the amount of real property taxes payable.
(3) equal to the actual value as determined by the assessor.
(4) both (2) and (3).
Answer:
Taxable value is:
(3) equal to the actual value as determined by the assessor.
List a few principal taxation authorities.
List a few principal taxation authorities.
Answer: Municipalities, Surveyors of taxes, Ministry of Education, BC Assessment, Municipal Finance Authority, and Regional districts.
A developer who builds a house and markets it towards first time home buyers does not have to charge GST on top of the sale price.
(1) True
(2) False
Answer:
(2) False. A builder who sells a property must impose GST on top of the sale price, regardless of who the property is marketed towards.
Who determines actual value, and what tax purposes does it hold?
Who determines actual value, and what tax purposes does it hold?
Answer:
Actual value is determined by an assessor, and is calculated based on the value of land and improvements. This value, in thousands of dollars, can be multiplied by the tax rate to calculate real property taxes payable.
The first avenue to dispute a property assessment notice is the Property Assessment Appeal Board.
(1) True
(2) False
The first avenue to dispute a property assessment notice is the Property Assessment Appeal Board.
Answer:
(2) False. The first avenue to dispute a property assessment notice is the Property Assessment Review Panel.
What is an improvement?
What is an improvement?
Answer:
An improvement is a structural addition to a land which can be considered to be a fixture.
What is the main factor for eligibility for the basic homeowner grant for property taxes?
Answer:
The main factor for eligibility for the basic homeowner grant is that the owner occupies the property as his or her principal residence.
GST is designed to apply to every transaction that is not specifically exempted from the tax.
(1) True
(2) False
Answer:
(1) True. Despite popular assumptions to the contrary, most types of transactions are subject to GST, and it is only where an exemption is expressly listed in the Excise Tax Act that the burden of GST is removed.
Besides determining the actual value of each parcel of taxable property, what other important task does an assessor do?
Answer: An important element of assessment is the assignment of a property class, or classes, to a parcel of taxable property. This is important because each class of property may attract a different tax rate.
Leila has constructed a home and grants a 99-year lease in the home to her grandmother who moves in immediately. Leila owes GST on the value of the newly constructed home.
(1) True
(2) False
Answer:
(1) True.
When a builder rents out a newly constructed home to a long-term tenant prior to a sale; the move-in by the tenant triggers the “self-supply†rule and GST is owed. The eventual sale is exempt, given that the tax liability already arose on the move-in.
