Revitalization tax exemptions
1. What is a revitalization tax exemption?
Section 226 of the Community Charter provides Councils with the authority to establish a revitalization tax exemption program bylaw that would exempt approved properties from the municipal portion of property value taxes. A revitalization program is a tool that can be used to encourage various types of revitalization and may be targeted to certain areas or types of properties.
2. Why is the Township doing this?
The Township is establishing a revitalization tax exemption program as an incentive for businesses and properties to beautify the Esquimalt Road corridor while also supporting heritage conservation. The initiative is part of Esquimalt’s Economic Development Strategy, which identified a number of strategies and actions for promoting economic growth and creating a welcoming climate for businesses and property owners.
3. Which properties are eligible?
At least 50 per cent of the area of a parcel is located within the revitalization area AND;
The Parcel is zoned for commercial use (includes mixed-use); OR
The Parcel is zoned for residential use with 4 or more dwellings at the completion of the project.
4. What is the revitalization area?
The revitalization area is defined as the area located within 150 metres of the Esquimalt Road corridor between Dominion Road and Canteen Road. View the Revitalization Area Map.
5. Why isn’t the Township providing this opportunity in other areas?
The initiative is part of Esquimalt’s Economic Development Strategy, which identified the revitalization of the Esquimalt Road corridor, through beautification, development and incentive programs, as a high priority for action.
6. Are single family dwelling units eligible?
No. Only parcels zoned for multi-unit residential use with 4 or more dwelling units at the completion of the project are eligible for a tax exemption.
7. Are buildings that have been stratified eligible?
Existing stratified buildings are not eligible for a revitalization tax exemption certificate. New development projects that will result in the Owner stratifying the building under the Strata Property Act are eligible.
8. What types of projects are eligible?
Projects that are eligible under the program include exterior alterations and upgrades of existing buildings and the construction of new buildings located within the Revitalization Area. The eligible project must also be the subject of a building permit and have a minimum construction value of $10,000.
9. When are applications due?
Applications are accepted on an on-going basis. Applications are reviewed by staff to ensure eligibility and then forwarded to Council for a decision.
10. How do I apply?
Applications must be in writing and provide a description of the project as well as a certificate from a contractor or design professional, certifying that the Project’s value will exceed $10,000.
Completed applications are to be submitted in an envelope clearly marked, or as attachment(s) via email with the subject line, “Revitalization Tax Exemption Application” to:
Ian Irvine, Director of Financial Services
Corporation of the Township of Esquimalt
1229 Esquimalt Road
Esquimalt, BC V9A 3P1
Email: [email protected]
11. Is there a fee?
The Revitalization Tax Exemption one time application fee is $100. Additional fees and charges will apply for the building permit and a development permit if one is required before undertaking the project.
12. When does the project need to be completed?
A completed building permit application must be submitted within 6 months of signing the Agreement. Project construction must be completed within 18 months of the building permit being issued.
13. How much will my tax exemption be?
The tax exemption applies only to the municipal portion of property taxes payable on the incremental increase in the assessed value of improvements over a period of 10 years.
14. Can the Township provide an estimate of how much the assessed value of improvements on my property will go up by due to revitalization?
No, staff are not able to provide any information on the future assessed value of land or improvements. Property assessment in British Columbia is the responsibility of the British Columbia Assessment Authority. Any questions about the assessment of property in Esquimalt should be directed to BC Assessment.
15. When will I start receiving a tax exemption?
The tax exemption will take effect once all the terms and conditions set out in the Bylaw and Agreement have been met. A Tax Exemption Certificate will not be issued until a final building inspection is completed and an occupancy permit has been issued. A Tax Exemption Certificate issued prior to October 30th will take affect the following taxation year.
Example 1: Certificate issued October 1, 2015 will take effect in 2016.
Example 2: Certificate issued December 1, 2015 will take effect in 2017.
About the tax process
Municipal vs. property taxes
Municipalities collect taxes on behalf of other taxing authorities. The tax exemption would only apply to municipal portion of property taxes and not on the taxes collected on behalf of other agencies such as School, Regional District, Regional Hospital District, BC Assessment Authority and Municipal Finance Authority. In 2015, the municipal portion of property taxes collected by Esquimalt was 62 per cent of total taxes collected with 38 per cent going to other authorities. Additionally, any tax rate increases on non-exempt assessment values would still be applied and would be payable.
Assessed value of improvements
There are two separate values that make up the assessed value of a property – the assessed value of the LAND and the assessed value of IMPROVEMENTS on that land. The tax exemption applies only to the assessed value of improvements to a Parcel. Property assessment in British Columbia is the responsibility of the British Columbia Assessment Authority. Any questions about the assessment of property in Esquimalt should be directed to BC Assessment.
Increase in assessed value
The amount of the tax exemption is equal to the municipal portion of property taxes payable on the incremental increase in the assessed value of improvements on the Parcel as a result of the revitalization project. The tax exemption is calculated using the difference between the assessed values of improvements on the Parcel in the year before construction and the assessed value of improvements the year following completion of the project.
Amount of tax exemption
The tax exemption will be provided for a period of 10 years at the following amounts:
Years 1-5: 100% of the increased assessed value
Years 6-8: 75% of the increased assessed value
Years 9-10: 50% of the increased assessed value
Based on the 2019 tax rates, the estimated annual municipal property tax exemption per each $100,000 of assessment value, at a 100 per cent exemption, would be as follows:
Class 1 Residential: $354
Class 6 Business: $1,078
For more information, please contact:
Ian Irvine, Director of Financial Services