Readers of this blog may recall that earlier this year I initiated a third-party appeal of the BC Property Assessment of the Dunsmuir Hotel property after the owner, Holborn Properties allowed it to deteriorate to such a degree that the city ordered it demolished. And I was successful. https://gellersworldtravel.blogspot.com/2025/04/from-city-hall-watch-bc-assessment.htmlIn early April, Nono Shen, a journalist with Canadian Press contacted me after City Hall Watch published its story and we had several frank and free-wheeling discussions about why I undertook the appeal. After speaking to me, I referred her to Jen St. Jens of The Tyee and she followed up with Derek Holloway, a former BC Assessor, and Robert Renger, a city hall watcher, who were also quoted in the City Hall Watch story.
Yesterday, her story went live and received considerable attention across the country. It was repeated in the Globe and Mail, National Post, Business in Vancouver, North Shore News, Victoria Colonist, Toronto Star and dozens of other media under the headline 'How undervaluation of Vancouver sies could cost millions in property taxes'.
Those knowledgeable about the property tax system in BC know this headline is not correct. Undervaluation does not cost millions in property taxes. Municipalities determine property taxes using mill rates, that are based on the amount of money they need from taxes, and the total value of assessed properties in various categories - business and other, industrial, residential, etc. If assessed values go down, mill rates go up.
However, the undervaluation of commercial properties can increase the property taxes collected from other classes of properties, especially residential properties.
That aside, below is Nono's story.
VANCOUVER — Retired architect Michael Geller says he's always
keen to restore some "justice" to Vancouver's real estate scene.
So,
when he noticed an official BC Assessment valuation of about $6.4 million on
the site of a former heritage hotel in downtown Vancouver — about a third of
its true value for tax purposes, by Geller's reckoning — he felt he had to act.
"The
point is we all go through life, and when we see things that aren't fair, some
people say: 'Oh, I'm not going to get involved.' I usually get involved when I
don't think something's fair, so that's why I did it," said Geller.
His
third-party appeal against the valuation of the site at 500 Dunsmuir Street,
owned by developer Holborn Properties Ltd., yielded agreement from B.C.'s
property assessment review panel, which increased the valuation to $18.9
million, in line with Geller's estimate.
He
said that means property taxes on the site of about 12,000 square feet will
increase by at least $130,000 for Holborn.
“I
was pleased," said Geller upon seeing the new valuation. "We got some
satisfaction."
Observers
of Metro Vancouver's real estate scene say the site of the 115-year-old
Dunsmuir Hotel, which was demolished in January after falling into what the
city called "severe structural deterioration," is far from unique.
Retired
appraiser Derek Holloway said B.C. could be losing hundreds of millions in
property taxes due to underassessment, while retired Burnaby city planner
Robert Renger said municipalities seem to take little interest fixing
underassessments that can be obscured by loopholes.
They
say the use of company ownership changes to dodge property transfer taxes make
it difficult for BC Assessment to do its job, and the agency needs to be
strengthened to give appraisers power to compel owners to respond to requests
for information.
Geller
said he appealed to the review panel in February after noticing the
"ridiculously low" valuation of $6,375,000, which worked out to about
a third of the per-square-foot valuations of five surrounding properties.
For
instance, Geller wrote in his appeal, the land at 570 Dunsmuir Street next door
had been assessed at $1,572 per square foot, compared to about $540 per square
foot at Holborn's site.
He
said he was particularly aggrieved by the treatment of the hotel by Holborn
leading up to its demolition, "and then they got rewarded by getting a
lower assessment."
The
firm has also been criticized for years over the slow pace of development at
its Little Mountain site in Vancouver that it bought off the provincial
government in 2008, a sale that resulted in the displacement of hundreds of
residents from social housing.
"So,
I appealed it," said Geller.
Holborn said in a statement that it received the reassessment and its priority
for the site was working with the city on a redevelopment to deliver housing,
"activate the street" and contribute to downtown Vancouver's economic
revitalization.
Holloway,
who was an appraiser with BC Assessment for 28 years, said he had identified
hundreds of under-assessed properties in recent years, calling them “the tip of
the iceberg.”
For
instance, Holloway pointed to two sites on the 4400 block of Kingsway in
Burnaby, sold for $145 million in 2022. But their assessed values have never
come close to that, peaking at $69.7 million in 2024.
In
2025, they were assessed at $58.2 million.
Then
there is the 14-acre former Oakridge Transit Centre on West 41st Avenue in
Vancouver, which transit provider TransLink sold for $440 million in 2016.
Holloway said its assessment has never neared the sales price, and BC
Assessment currently has it valued at $271.1 million.
The
site was resold to developer Grosvenor, which says it plans to build 1,630
homes there.
Holloway
said he suspected BC Assessment had never seen a copy of either sales
agreement.
He
said BC Assessment often accepts the property owner's position when assessing
such sites because the agency is afraid to exercise its "very limited
power" within the Assessment Act, and it lacks reliable market
information.
"They
have very limited expertise for the valuation of large, sophisticated
properties, and finally and most importantly, their other customer, the taxing
jurisdiction is not interested. They can always say that they were just relying
on BC Assessment, (and say) it is their fault, not ours" said Holloway.
'THAT'S HOW MEDIANS AND AVERAGES WORK'
BC
Assessment said in an email that it can’t comment on any individual case.
But
Bryan Murao, the Crown corporation's assessor for residential Lower Mainland,
said in an interview that it’s easy for critics to pick sales that exceed
assessed value. Others could point to sales below assessment.
“I
mean, that's how medians and averages work,” said Murao, “I think it's been
convenient for people to go and pick the sales they want to try to prove
something that they're trying to prove.”
He
said an assessor looks into every single sale that comes through, although he
was aware of practices in which commercial properties are traded without actual
title transfers.
"We
do our best to try to find every single type of sale that occurs in the market,
and to be able to include that in our analysis that we use to determine how
much properties are worth."
The
legal transfer of properties by use of company ownership is a well established
way to avoid the property transfer tax that is incurred when title changes
hands. The change of beneficial ownership is instead achieved by selling a
company that owns a site, so title does not actually change.
Renger,
a retired senior development planner for the City of Burnaby, B.C., applauded
Geller’s intervention in the Dunsmuir case, calling him “a hero.”
But
he said he was disappointed the City of Vancouver didn't do so first.
"They
are not trying to protect the little guy," said Renger, "Basically,
they could have done the appeal that Michael did."
He
said many sales in B.C. involve bare trust companies, in which legal ownership
of a site is separate from true beneficial ownership, making it more difficult
for authorities to trace records.
When
it comes time to sell the property, the bare trust company is sold to the new
owner, without triggering any property transfer tax since there is no change in
title.
“It
makes it a bit harder for people, both the public and BC Assessment, to track
sales that are happening because they're not well-documented,” said Renger.
Holloway
agreed, pointing to bare trusts and deferred sale completion dates as ways to
keep BC Assessment "in the dark."
He
said sections of the Assessment Act were "toothless," allowing some
property owners to ignore BC Assessment requests for information without
penalty or serious consequences.
Holloway
said his own reviews have revealed "hundreds of under-assessed
properties" and extrapolating this across B.C. could mean "hundreds
of millions of lost property taxes."
The
Ministry of Finance said in a statement that it's important that commercial
property owners pay their fair share, and the province "closely follows
reports of under-assessed properties."
It
said the ministry also audits property transfer tax payments, which helps
ensure transparency from commercial property owners.
The
City of Vancouver said it "respects and relies" on BC Assessment’s
expertise in property assessment, and the city typically does not initiate
appeals or apply for intervener status unless they pose "significant
precedent-setting implications."
Geller
said big developers are usually armed with experienced consultants to appeal to
BC Assessment and its “relatively small number” of professionals, putting the
assessor in a "David and Goliath" situation.
He
said that if commercial assessments are too low, the burden of tax paying might
be shifted to the residential property owners.
“And
that's why I did go around to my friends and said: as a result of this appeal,
I may have knocked a couple of cents off your property taxes,” said Geller.
This
report by The Canadian Press was first published June 11, 2025.
Nono
Shen, The Canadian PressVANCOUVER —
This report by The Canadian
Press was first published June 11, 2025.
Nono Shen, The Canadian Press