The Current Commercial Property Tax Landscape

Currently 43% of Vancouver property taxes are paid by commercial tenants, while they occupy only 7% of the land base of Vancouver.  This tax burden is predominantly borne by small businesses in Vancouver.  

All taxpayers, no matter their share of the burden, value the Local Independent Businesses in their communities. These types of businesses provide the social fabric of our society where people meet, shop and socialize.   In a post pandemic world these businesses are in rapid decline and require financial assistance. This proposal provides property tax relief to these businesses through a Commercial Cultural Grant and remain revenue neutral with the cultural grant renumeration fund.

Commercial Cultural Grant

The goal of this grant is to encourage commercial property owners to lease to businesses that contribute to the cultural landscape of the city / province. This incentivizes commercial property owners to take calculated risks on independent businesses rather than anchor multinationals or large corporate chains.  This also allows breathing room for small businesses to take more risks and further contribute to culture and enhance the spaces and communities they occupy.

The Commercial Cultural Grant saves approximately 60% of the commercial property tax bill. This puts an eligible property into a “Class 8” tax rate as defined by the BC Assessment Act.

To encourage landlords to lease premises to eligible cultural businesses it is proposed that 75% of the tax relief flows to the tenant and 25% flows to the owner of the property.

Cultural Grant Remuneration Fund

The tax relief in this proposal is revenue neutral to both the Province and Municipalities as the shortfall from the class shift is re-allocated under the Cultural Grant Remuneration Fund.

A property owner who has vacant space in a property which is zoned by the municipality such that it would allow for this type of cultural use will be allocated a surplus tax bill if a property is vacant for a period more than 6 months minus a day within the previous assessment period.

This fund will encourage commercial spaces to be occupied and incentivize land owners to lease to an eligible cultural entity.  Additionally it will put downward pressure on base rent which will balance out the market into something more sustainable long term

Eligibility:

• Landlord leases to a vetted cultural business entity
• Under 3 million in revenue
• Owned by a BC resident or BC corporation owned by BC resident(s)
• 1 location eligible per municipality / less than 3 locations in total
• Contributes to local cultural landscape, restaurant, bar, pub, music venue, dance centre, art / music festival, etc

Potential Exemptions:

• Space is being renovated or in TI stage / awaiting permits, change of use
• Owner has made all reasonable efforts to lease vacant space