Model a ‘very sustainable approach’ that’s created taxation difficulties
Glenda Luymes
Province
Co-director of planning Larry Beasley says changes won’t affect artists and authors. Photograph by : Ric Ernst, The Province
Vancouver City Council will approach the province in the new year about creating a separate tax category for live/work properties, Larry Beasley, the city’s co-director of planning, said yesterday.
“These properties already fall into their own category,” he said. “They’re not strictly residential or commercial, and it makes sense to suggest a new tax category for them.”
Beasley said the city has allowed the development of a number of live/work buildings in which buyers can set up a home and run a small business. The city is concerned about taxation of live/work businesses that have employees and on-site retail customers.
“We’re not talking about commercial activities that are done in private. Artists, authors and people who work from home won’t be affected,” he said.
Beasley first called for the new tax category earlier this month at a leadership summit where the possibility of Vancouver becoming a bedroom community for its growing suburbs was discussed.
At the summit, Beasley dismissed the “urban myth” that housing is gobbling up office sites in the city’s core, and instead promoted mixed-used development.
“We want people to live as close to their work as possible,” he said yesterday. “The live/work model is a very sustainable approach, but it creates taxation difficulties.”
The difficulties stem from the huge disparity between residential- and commercial-tax rates in the city. A Vancouver business owner pays about five times more than a homeowner for a property of similar value.
Live/work properties don’t logically fall into either category.
Small-business owners worry that the high commercial-tax rate will act as a deterrent to new business.
Georges Pahud, president of the Real Estate Board of Greater Vancouver, has said the city’s high business property tax “imposes a significant burden on businesses in the community — most of which are small business.”
But Coun. David Cadman said yesterday the high property tax is partly the result of Vancouver’s position as a “core municipality” in the region. “The level of service is different in this municipality. I have yet to meet a business person in Vancouver who said they’ve had to close their business because the tax rate was too high. Businesses in Vancouver have access to better services and a far larger pool of purchasers.”
Cadman also said he’d like to see the provincial government give city councils the power to determine the tax categories themselves.
“Adjusting the tax category for live/work businesses might be part of the answer to the gap between residential- and commercial-tax rates, but we also have to look at how we work with the province and where our revenue comes from,” he said.
© The Vancouver Province 2005