A group of Richmond property owners has launched a campaign to reassess their property taxes amid the uncertainty surrounding the Cowichan court ruling.
“In fairness, I think it would be hard to argue that these properties have not had their values affected by this decision,” Paul Sullivan, principal and practice leader of advocacy and tax policy for Canada at Ryan Tax Firm, told Global News.
“And since value is used to collect property taxes, it would be only fair for us as tax agents to represent as many of them as possible in a mass property tax appeal and at least do something for them by lowering their property taxes through an appeal of the value.”
The federal and provincial governments are appealing the B.C. Supreme Court’s ruling in favour of the Quw’utsun Nation, or Cowichan Nation, that found it had “established Aboriginal title” to more than 5.7 square kilometres of land on the Fraser River in Richmond, south of Vancouver.
The City of Richmond has also joined the appeal.
“I think a lot of people are a bit unsure about what exactly has happened to their title of their properties and I think we can we can accept that, but all real estate is always valued based upon risk and so risk is the first determinants in how we value a property and whether that’s a leased property or it’s a redevelopment site,” Sullivan said.
“The certainty as to the future possibilities with property speak to risk, and when risk goes up, value goes down, and whether we can specifically prove the impact of the situation today, maybe not, but the risk has increased dramatically.”
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B.C.’s annual assessment includes an Assessment to Sales Ratio (ASR), which is a measurement of how close the assessment of a sold property is to market value.
“So the difficulty we’re in right now is, I don’t think these properties are salable,” Sullivan said.
“Value is unknown at this point. We need to quantify the risk that has been imposed on these properties from this decision and then correlate that to evaluation.”
Most of the properties within the 5.7 square kilometres of land are commercial and industrial but there are about 150 residential properties.
Sullivan said they will be reaching out to everyone affected.
“Taxation in British Columbia is so high now,” he said.
“With the additional school tax over $3 million, residential tax rates really aren’t that far off of commercial tax rates anymore. You know, if you happen to have vacant land, maybe you’re also dealing with speculation and vacancy tax. So all of these things are based off of assessed values, and it seems unfair that people should be paying the same level of taxation when they don’t even know what their property rights are anymore.”
Aboriginal title gives Indigenous peoples claim to territory never ceded by their ancestors, allowing First Nations jurisdictional authority to use the land as it sees fit. Courts have repeatedly upheld that it is constitutionally protected, including in British Columbia.
At issue in the Cowichan case is whether Aboriginal title supersedes what’s known as fee simple title, the term used for private land ownership, or whether the two can coexist.
Both the court ruling and the Cowichan themselves have said the plaintiffs weren’t seeking to invalidate fee simple titles, but that they wanted lands held by government returned to them.
Any privately-held properties would only be affected once they’re sold, lawyers for the First Nations have said, though it remains unclear what the impact could be on future sales of those properties. The ruling, however, declared fee simple titles held by the Crown and the City of Richmond invalid under Aboriginal title, leading to the overall confusion.
Sullivan said he is not suggesting that affected Richmond property owners don’t pay their property taxes, but the owners could get a break as their properties are potentially not as valuable.
“You have to pay your proper taxes,” he said. “The question is how much should you pay? What is fair? There are other mechanisms that could, the city of Richmond could in fact, provide property tax relief. They’re statutory. They’re available through provincial law, but we heard (Richmond Mayor Malcolm) Brodie say last week he’s not interested. So that if we’re talking about property tax relief, the only avenue for owners is through appealing their assessed values.”
The court case is being appealed by all levels of government, as well as the Cowichan, and could take years to settle. The province is seeking a stay of the decision until the Court of appeal can hear the case.
“But the uncertainty, I recognize the serious issue, and we need to resolve that as quickly as possible,” B.C. Premier David Eby said on Monday.
“Which is why we’ve been expediting our work at the Court of Appeal to be able to get to their next step.”
The City of Richmond and the B.C. government are asking property owners to document any impacts to the value and potential sales to help bolster the appeals process.
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