Hangar Tax Assessments CYYJ

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AirFrame
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Hangar Tax Assessments CYYJ

#1 Post by AirFrame » Tue Dec 19, 2017 3:45 pm

Does anyone else here own a hangar at Victoria, BC (CYYJ)? Our hangar association just received an "advance warning" from BC Assessment that our building value assessment is being raised 533%. No, you didn't read that incorrectly. Land value is increasing only 10%, so the overall increase on the property plus buildings will be 143%. This is following at least 10 years of "reasonable" changes, with increases and decreases in the 2-5% range.

I'd be interested in hearing if any other owners associations at CYYJ or elsewhere in the province are getting the same treatment.
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Re: Hangar Tax Assessments CYYJ

#2 Post by 7ECA » Tue Dec 19, 2017 4:55 pm

Bloody hell, that's quite an increase in assessed value. Wasn't the average increase for residential property "only" about 20% for last year?

I'd sure as hell fight that, and get it reassessed.
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Re: Hangar Tax Assessments CYYJ

#3 Post by AirFrame » Wed Dec 20, 2017 8:01 am

That is the plan. Looking at the history, it really looks like someone just accidentally typed a "1" at the beginning of the building value. We're penning an objection now, just thought i'd reach out and see if anyone else was hit with the same stick.
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Re: Hangar Tax Assessments CYYJ

#4 Post by 7ECA » Wed Dec 20, 2017 12:33 pm

There's also an appeal "tribunal", as it were, where you can argue that your assessment is incorrect - over valued, etc.

Is there any reason why there'd be an increase in value, beyond the normal few % here and there? Significant upgrades?
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Re: Hangar Tax Assessments CYYJ

#5 Post by AirFrame » Thu Dec 21, 2017 7:36 am

No changes at all. In the last few years the building value assessment has been trending steadily down, likely due to depreciation on the structures. Land value has been trending up, of course, but that's expected. No massive jumps in any of those. Property taxes have even been relatively constant for the last 15 years that I could research. It's not a new set of buildings, either, built in 1984.
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Re: Hangar Tax Assessments CYYJ

#6 Post by 86583 » Thu Dec 21, 2017 8:39 pm

stupid part is we don't own the land, lease only from the VAA.. the buildings are reducing in value..
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Re: Hangar Tax Assessments CYYJ

#7 Post by 7ECA » Thu Dec 21, 2017 8:49 pm

Well, BC Assessment likes to tell people that this is good - when you sell you can make a killing. Ha...ha...

The problem of course, is for people who have no interest whatsoever in selling and would like to stay in their homes, seniors and families for one.
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Re: Hangar Tax Assessments CYYJ

#8 Post by Jeff Liot » Wed Jan 03, 2018 6:33 pm

Hey Guys
We are Northside Hangars Ltd Hangar #40
Yup, we also got hit with a mega increase. Suddenly, they think our little complex is worth over 1.7 mil.
We are going to fight this with every resourse we have.
However, it would be way way better if we could get together on this as collective group.

I am not super computer saavy, but if you e mail me directly i will certainlt respond.
There is no better time than now for all of us hangar members to act collectively, so please lets do all we can to get toghther on this.

Jeff Liot
Director
Northside Hangars Ltd
250 208-4236
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Re: Hangar Tax Assessments CYYJ

#9 Post by Nephilim » Thu Jan 04, 2018 12:11 pm

I think that if your local airport land and hangers have not yet been hit by new and huge tax assessments, they are coming to airports/aerodromes across Canada.

Maybe should be class action against these increases.

Shouldn't this be a case where the argument of federal jurisdiction because of the Aeronautics Act could prevent huge provincial or municipal tax increases due to the negative effect on the general aviation industry across Canada?
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Re: Hangar Tax Assessments CYYJ

#10 Post by Kejidog » Thu Jan 04, 2018 4:28 pm

Nobody cries for the rich.

But seriously the powers that be look at anyone with disposable income as a cash cow to milk dry. And they probably figure that if you own a hangar you’re loaded.

It is an all out class war on the middle classes.
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Re: Hangar Tax Assessments CYYJ

#11 Post by 7ECA » Thu Jan 04, 2018 5:31 pm

Just received our property assessment in the mail (not a hangar...). Increase of 2%, what a friggin' joke. The problem is, we've got no interest in selling, so this just keeps making it more expensive to stay in our home as taxes keep increasing.

What I find even more interesting, is that for years we would have increases (and occasionally a decrease) in the neighbourhood of 2-3% annually. Then, in 2016, there was a 33% increase in value. Why? Who the F$&! knows. Maybe this blip is now hitting hangars and airport property?
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Re: Hangar Tax Assessments CYYJ

#12 Post by rookiepilot » Thu Jan 04, 2018 6:34 pm

Every pilot I read on these blogs wants wages to go up.

No one wants the price of anything else to go up.
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Re: Hangar Tax Assessments CYYJ

#13 Post by CpnCrunch » Thu Jan 04, 2018 8:00 pm

So what is your hangar actually worth, versus the current and previous assessment? I'm guessing that perhaps it was undervalued before.
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Re: Hangar Tax Assessments CYYJ

#14 Post by AirFrame » Sat Jan 06, 2018 10:13 am

An update for anyone following along:

I spoke with the person who did the re-assessment at CYYJ last year. He says that BC Assessment re-evaluated all airports in BC last year. Apparently a survey was sent out to hangar owners across the province, asking for information on rental rates and unit sale prices, but they didn't get much response. Possibly people just didn't want to share anything because they were afraid of increases? Well, that's now coming back to haunt people who either didn't get the survey, or didn't respond to it.

In the absence of any other data, BC Assessment is obligated to find a current market value, in any way they can. Hangars are generally held in some form of Company arrangement whereby owners buy shares in the company and get use of a hangar space in return. It's a paper exercise that serves to separate sales transactions from the tax man, and as a result the tax man doesn't get any data when transactions take place. So they look at other similar use properties that they *do* have data for (even when the "similarity" is questionable), such as the sale of a warehouse building off the airport, and apply the same metrics. So everything gets classified as "Warehouse" and valued similarly to other (commercial) warehouses in the area.

Note that BC Assessment's position is that there is no way to remove hangars from a "commercial" classification. The best you could hope for is an "order in council" from the local municipality to "forgive" the taxes if the properties are used recreationally. The base classification of the property is, and will be, commercial, but the taxes would be "forgiven" because we're not using them commercially. UPDATE: This is a common tactic of BCA, to separate themselves from the taxes paid. This gets you to accept the valuation and to hope that you can get the municipality to forgive the taxes (yeah, right). But it legitimises BCA's assessment and that makes it a baseline for future years when they do it again.

All that being said: They expressed a willingness to listen to data that shows the *actual* market value for the hangars. We've been asked to submit recent sales figures for individual bays, and/or rental rates for the bays being rented by owners, that could be applied instead. UPDATE: This is apparently their way of getting you to "show your cards" before you get to an appeal. If you give them any data, they will find a numbe of ways to refute it's validity, and when you get to your appeal you won't have anything to argue. What you thought was a friendly telephone exchange a month previous will turn into a deposition that they will tear down piece by piece.

Our complex had two hangar bays added after it was completed, and it looks like they didn't have that square footage in their numbers until they did the audit this past year. That explains a bit of the increase, but that's only two bays out of 16... It's not a 140+% increase in square footage... More like 8%.

It would help greatly if anyone in the Lower Mainland or Vancouver Island who knows the rental rate and square footage of hangars on their field could send it to me, either posted here or by private message if you prefer. If you could indicate the approximate age of the building, and whether the hangar has anything special about it (power, insulation, heat, bathroom, whatever) that would be useful too.
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Re: Hangar Tax Assessments CYYJ

#15 Post by ahramin » Sat Jan 06, 2018 12:16 pm

DAPCOM did a hangar rates survey last year.
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Re: Hangar Tax Assessments CYYJ

#16 Post by Tailwind W10 » Sun Jan 07, 2018 8:11 am

We have situation here in Alberta, not quite the same but related. I live in an Airpark in Wetaskiwin, CEX3. The Alberta Municipal Government Act has only one zoning definition with the word "Airport" in it, "Airport - Commercial". Not surprisingly that's what we're zoned here, although the city council and administration have allowed "security suites" to be occupied 365 days per year, ostensibly allowing a residential airpark to exist. The downside is we're all charged property taxes based on commercial rates. The MGA doesn't allow for different rates on different properties within a zone. The airpark is only just getting started, but not surprisingly, as the tax rates have become clear and better known, the sale of new properties here have halted entirely for the past year.

I contend that the government administrators just haven't had the imagination to understand that the majority of airplanes and hangars are recreational and not business. I just looked up the stats for Dec 2017 on the Canadian Civil Aircraft Register. There are 6952 aircraft registered commercially, and 29,371 registered privately. (interestingly that includes one ornithopter) Similarly, by my personal count, my airport has 55 hangars, I believe there are 8 that are occupied by businesses, the rest are privately owned housing recreational aircraft.

I can't argue that those hangars should be zoned and taxed at 'residential' rates. I do believe however that there should be some mechanism that would recognize NOT ALL of aviation is commercial. The taxation systems should allow municipalities flexibility to tax recreational and commercial properties reasonably. We've got a small group of owners here (representing the whole group) that are lobbying the city and provincial administrators. We seem to be getting some recognition of the issue, most of them tell us their hands are tied by regulations. At least here we've got a revision to the MGA happening. We don't yet know what's going to be in it, but we're working to have some language included that will allow municipalities more leeway to assess different property tax rates within the airport zone.

You may need to get into it a lot deeper. If B.C. is like Alberta, the framework for property taxation is set by the province, and administered by municipalities. It took us a couple of years just to find out who in the provincial administration is writing the new MGA regulations. We've had some conversations with them, but of course government moves a little slower than glaciers, while we're not confident we are hopeful that we'll get some relief.
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Re: Hangar Tax Assessments CYYJ

#17 Post by Boney » Sun Jan 07, 2018 9:03 am

Check out Okotoks's Air Ranch. An airport with both residential and commercial concerns.

Cheers.
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Re: Hangar Tax Assessments CYYJ

#18 Post by Tailwind W10 » Sun Jan 07, 2018 9:39 am

Yeah, we're familiar with Okotoks as well. Many communities have come up with ways to apply taxes that aren't strictly in accordance with the MGA. Our city unfortunately has chosen to stick to the precise letter of the law. That's hard to argue against, though it puts our airport at a distinct disadvantage. I've heard about Dr. Goosen in Ponoka. (he's the CAME in Ponoka BTW) He built a 10,000 sq foot hangar there in 2016, his property tax in 2017 was $2,600. My 3,600 foot hangar in Wetaskiwin was assessed $8,900. To be fair mine has a 800 square foot loft which I live in, where his is a raw hangar, but still...

Our city administration knows full well they've got our airport completely hamstrung, but they're consciences are quite clear as they're following the letter of the regulations. Until the regs give them options we're pretty much screwed.
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Re: Hangar Tax Assessments CYYJ

#19 Post by 7ECA » Fri Jan 12, 2018 6:28 am

Looks like COPA is now going to bat for hangar owners in BC.

https://copanational.org/en/2018/01/11/ ... r-2017XXXX
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Re: Hangar Tax Assessments CYYJ

#20 Post by AirFrame » Fri Jan 12, 2018 7:43 am

Yes, the process is starting. We're asking all hangar owners in BC who have received large increases this year, or who have been switched from the Cost to the Income model, or who already know they are classified alongside Industrial Warehouses, to appeal their assessments before the end of January. The appeal is free, and can be withdrawn at any time. But if the appeals aren't in before the end of the month, they can't be entered later if this gains momentum. The more of us who fight, the stronger our voice will be with COPA, and in the (eventual) media coverage.

The ideal solution will be a reclassification of private, recreational hangarage to something similar to the garage attached to your house. That wholesale reclassification effort will take some time and resources, and we're hoping COPA can help with that. For the year-over-year valuation increases we're seeing, I suspect the overhead of attending one hearing per hangar complex would be beyond COPA's resources to support (unless it were possible to do a class-action of some kind). The best thing instead would be for us to put together some best practises for dealing with BCA and a plan of attack that any owner can follow to push for change.
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Re: Hangar Tax Assessments CYYJ

#21 Post by AirFrame » Fri Jan 12, 2018 1:16 pm

Further update: Reports are coming in from across the province of massive increases, and many have launched appeals following COPA's mailout.
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Re: Hangar Tax Assessments CYYJ

#22 Post by 7ECA » Fri Jan 12, 2018 2:43 pm

Good for the owners - although the appeals process is a joke with BC Assessment.

You appeal, eventually get a phone call from them where they try to talk you out of it by telling you that you either won't get a reduction, or threaten that they may even realize that your property is "undervalued" and increase your assessment.

When you still won't back down, they let you know that there are appeal panels that meet at inconvenient times for anyone working (usually the middle of a weekday), and these kangaroo courts with zero accountability to anyone can do whatever the hell they want.

All you can do is go in with tons of evidence that shows the true value of hangars, selling values for comparable hangars works well (and if you can prove that yours has been assessed in some asinine manner - compared to others with similar sizes, or even better is showing discrepancies when it comes to the valuing of square footage of X versus Y, etc...). Good luck.
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Re: Hangar Tax Assessments CYYJ

#23 Post by CpnCrunch » Fri Jan 12, 2018 6:41 pm

I think if *all* the hangar owners go through the appeal process with accurate figures, you'll be more likely to get a reassessment.
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Re: Hangar Tax Assessments CYYJ

#24 Post by Schooner69A » Fri Jan 12, 2018 9:56 pm

For comparison, my 2018 Property Assessment Notice on my Vernon hangar indicated that my assessment went up 6 percent...
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Re: Hangar Tax Assessments CYYJ

#25 Post by AirFrame » Sat Jan 13, 2018 9:51 am

Schooner69A wrote:
Fri Jan 12, 2018 9:56 pm
For comparison, my 2018 Property Assessment Notice on my Vernon hangar indicated that my assessment went up 6 percent...
Schooner69A, is your hangar classified "Busines or Other" or "Industrial Warehouse"? If so, the taxes you pay at the end of the day are a lot higher than they would be if it were classified residential or recreational. With COPA circling around the issue with the possibility of bringing the big guns along to fight it, now may be the time to fight your assessment on Classification alone... Assuming you're happy with the assessed value.
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