REAL PROPERTY TAX - Assessment - Methods - Valuation of land - Methods of - Factors affecting - Environmental contamination

Appeal by the assessor from a judgment on the property owner’s stated case appeal from a decision of the Property Assessment Appeal Board assessing its property at $975,000. The respondent owned a property on which it had operated a gas station, automobile dealership and automobile repair shop for many years. The soil under the property was contaminated and there was no competitive market for it. The property was not listed on the Contaminated Sites Registry, nor had any remediation order been issued with respect to it. The owner renovated the existing building for use as commercial rental units without any remediation being required. The Board assessed the property at $975,000 on the basis of its value to its current owner using an income approach. On appeal by the property owner, the Property Assessment Review Panel reduced the assessment to $500,000. The owner then appealed to the Property Assessment Appeal Board, arguing that the property had no value. The Appeal Board accepted the assessor's position that as a multi-tenant commercial building, the property had a market value of $1,080,000, and it reinstated the original assessment. The owner then appealed to the Court. The judge allowed the appeal, finding that the Board erred in its approach to the assessment value of the property given the presence of environmental contamination, and remitted the matter to the Board for reconsideration. The assessor appealed.

HELD: Appeal allowed. The Board’s reassessment was restored. The appropriate standard of review was reasonableness, as the Board was engaged in the interpretation of its home statute. The Board’s approach was reasonable. In determining that the highest and best use of the property was as a one-storey renovated building, as opposed to a two-storey mixed-use redevelopment which would require remediation, the Board took the contamination into consideration.

Victory Motors (Abbotsford) Ltd. v. British Columbia (Assessor of Area No. 15 – Fraser Valley), [2017] B.C.J. No. 1541, British Columbia Court of Appeal, S.D. Frankel, D.C. Harris and G.J. Fitch JJ.A., August 4, 2017. Digest No. TLD-Sept42017005