Property Assessments of Conservation Lands
A Guide for Land Trusts and Conservation Land owners
Including case studies, references and bibliography of research on conservation land values
Elk River, NCC protected site
Land Trust Alliance of British Columbia
THIS INFORMATION KIT DEVELOPED AND PRODUCED IN 2006 WITH FUNDING FROM:
Introduction
This following Information Kit was developed by the Land Trust Alliance of BC with additionalinformation provided by the BC Assessment office and Alan Kotila, Accredited Appraiser with DR Coell& Associates.
Funding was generously provided by the Victoria Foundation, the Vancouver Foundarionand the Real Estate Foundation of BC
.As covenants only became a conservation tool for landtrusts in the mid 90’s, there is limited market evidence to measure the impact of conservationcovenants on property assessments. The case studies in this guide were selected from theGreater Victoria region; however this research has brought to light important information, andsteps that landowners and land trusts should take to ensure that BC Assessment is advised of thedetails of the covenant’s impacts on market value. The Land Trust Alliance of BC believes thatthis information is useful for a variety of interests, including landowners considering aconservation covenant, the land trusts that assist in protecting these significant natural or culturalsites, and assessment staff in BC communities. The BC Assessment Authority wishes to ensurethat covenants are duly considered. Many thanks to Jennifer Paton for providing the case studies,TLC for their assistance with the property data, John Pebbles and the staff of BC Assessment forinformation on their policies, and Alan Kotila for providing a review and report on the data inaddition to his own knowledge of appraisals and assessments of covenanted properties.
Definitions
Land Trust
(
Land Trust Alliance of British Columbia
)A non-profit, charitable organization committed to the long-term protection of natural and/orcultural heritage. A land trust may own land itself, or it may enter into a conservationcovenant with a property owner to protect or restore natural or heritage features on theowner's land. Land trusts also engage in stewardship, restoration and management of lands.The words "land trust" and "conservancy" are often used interchangeably.
Conservation Covenant
(
Land Trust Alliance of British Columbia
)A voluntary, written legal agreement between a property owner and either a governmentbody or one or more land trust organizations designated by the Surveyor General, on behalf of the Minister of Agriculture and Lands, that sets out specific restrictions or requirementsthat the landowner will uphold to ensure conservation of all or parts of the land. It isregistered on title and "runs with the land" (it continues to exist on title after the property issold or transferred, binding future owners).
Property
(Assessment Act
) Includes land and improvements
Subject Property
(
BC Assessment
) Property that is the subject of assessment and taxation.
Improvements
(
BC Assessment
)Any building, fixture, structure or similar thing constructed or placed on or in the land, or waterover land, or on or in another improvement (i.e. houses, roads).
This report may be copied by land trusts noting its source. LTABC July 2006 with assistance from BC Assessment, and Alan Kotila, Appraiser..
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Contents
The Assessment Process in BC ……………………………. 2Assessments on Properties with Conservation Covenants. 3Assessments on Properties owned by Land Trust ………… 6Other Tax Consequences……………………………………. 8Case Studies ………………………………………………….. 9Bibliography of Research on Property Tax ……………….. 11Further Resources on Conservation ………………………. 15
The Assessment Process in BC
BC Assessment produces independent and uniformproperty assessments annually for all property owners in the province. Assessors are required, bythe Assessment Act to determine the actual (market) value of a property for assessment purposes.Actual value means “the market value of the fee simple interest in land and improvements”
An ancient cedar shades the forests flooron Gabriola Island. Islands Trust Fund.
Market value is defined by the Appraisal Institute of Canada as follows:
“The most probable price which a property should bring in a competitive and open market as of the specified date under all conditions requisite to a fair sale,the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.”
The valuation date is July 1 based on the property condition as of October 31; the notice ismailed at the end of the year. Most properties are to be assessed at actual value. Exceptionsinclude dams, power plants, infrastructures such as pipelines, farm property and managed forestlands.Once a property’s actual value has been determined, it is used as a base for the tax rolls createdby municipal and rural taxing authorities. The tax rate is calculated as a percentage of the nettaxable value of the subject property, that is, actual value less exemptions. The applicability of various exemptions depends upon a property’s location and other unique characteristics such asthe property’s ownership, use, or features.Staff at BC Assessment is required to consider all factors which affect the market value of aproperty. If a covenant is registered against a property, they must consider if there is an impacton the value of the property. Whether or not, or to what extent a covenant will impact the actualvalue of the property will vary based on the restrictions stated in the specific covenant. Thedifficulty in measuring the impact of covenants is that there is limited market evidence to dateand covenants vary. BC Assessment values all properties in British Columbia and by necessityuses mass appraisal techniques. Thus, detailed appraisals such as those required by the CanadianWildlife Service for Ecological Gifts, would need to be undertaken by an independent appraiser.2
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Property Tax Info Kit
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