Permissive tax exemptions in Vancouver

As British Columbia's largest city, it makes sense for the City of Vancouver to be the first municipality we profile in our Fair Property Tax Exemptions series. However, Vancouver is actually a fascinating case for the way the city council has set its priorities.

As we've set out, Vancouver is a unique municipality in the province as it operates under its own law, the Vancouver Charter. Nevertheless, the law still sets out that the city must provide certain statutory exemptions and is granted the discretion over other permissive exemptions.

The best source to understand this breakdown and what it means in real terms is an administrative report prepared by the Director of Finance for Vancouver City Council in April 2018. Starting on page 10 it sets out the types of property that receive statutory and permissive exemptions in Vancouver.

For our interests, statutory exemptions include "Churches owned and occupied by religious organizations, and in use for the public worship of God." There are additional statutory exemptions for properties owned, occupied and in use by charitable organizations, public and independent schools, hospitals and emergency shelters (and a few other categories). While the Vancouver Charter doesn't single out religious properties for permissive exemptions, City Council could choose to provide them under section 396F, exemptions for not-for-profit property.

However, as the report states:

To date, Council has not implemented additional permissive exemptions outside of heritage exemptions. In September 2011 (RTS 08713), Council adopted the policy to continue to support not-for-profit organizations through the existing range of statutory exemptions available under Section 396(1) of the Vancouver Charter and the City’s grant programs; permissive exemptions will not be considered.

In other words, City Council has explicitly said they only want to extend exemptions to heritage properties and other organizations will be supported through direct grants from the city.

So while active churches themselves are exempt from municipal taxes, any other property owned by a religious organization in the City of Vancouver is possibly subject to property taxes. As most churches are registered charities, these properties are arguably exempt, provided they are "wholly in use for charitable purposes."

One notable exception, however, would be the Church of Scientology of British Columbia who own the building at 401 W Hastings. While the Canada Revenue Agency has not recognized Scientology as a charitable organization, BC Assessment has classified their property as a church and it is therefore exempt from municipal taxes. If their $6.7 million property was assessed at a full rate for an equivalent non-profit, the Church of Scientology would owe nearly $27,000 per year in property taxes.

Nevertheless, Vancouver City Council's decision to not extend additional permissive exemptions is a notable exception to the provincial norm.

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