Property tax & penalty dates in BC municipalities: Key details for lenders

Updated on June 12, 2020

On April 16, 2020, the British Columbia government announced that penalties for late payment of property taxes for commercial properties would be delayed by 3 months – i.e. penalties cannot be charged until October 1.^[1]

However, on May 19, 2020, the British Columbia government posted an update on its website noting that "[f]or municipal property tax due dates and penalty dates, please contact your municipality or review your tax notice."

On this basis, the Province left it with each municipality to:

1. maintain a July 2, 2020 due date;
2. extend the due date as appropriate; or
3. maintain a July 2, 2020 due date but extend the penalty date as appropriate.

What this means for lenders and borrowers

This is particularly relevant to commercial real estate lenders and borrowers as it raises the following issues:

1. Defaults under loans: We note that mortgages generally provide that Borrowers must pay all property taxes when due. If a borrower takes advantage of the delay in the imposition of penalties but the due date for payment has not changed, it could be considered a default of the borrower's obligation to pay taxes "when due" under the mortgage or credit agreement; and
2. Priority: None of the property tax deferral arrangements discussed herein changes the law regarding priorities. Unpaid property taxes and utilities, including interest and penalties, continue to take priority over mortgages. Accordingly, Borrowers must continue to provide satisfactory evidence of payment on the applicable due date.

Property tax & penalty dates

Only Vancouver, Coquitlam, Port Coquitlam and Victoria have extended the actual due date for commercial property taxes. Each of the other municipalities listed below has extended only the penalty date.

Here is a summary as of June 1, 2020 on what the following selected British Columbia municipalities are doing with respect to commercial property taxes:

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1. Vancouver

The City of Vancouver has extended its due date for property taxes to September 30, 2020.^[2]

2. Abbotsford

The City of Abbotsford has not extended its due date for property taxes, which remains July 2, 2020.^[3]

However, the City of Abbotsford has adjusted its penalty dates as follows:

• For properties in Class 1 (Residential), 2 (Utilities), 3 (Supportive Housing), and 9 (Farm), there is a 5% penalty on July 3, 2020, and a further 5% on September 16, 2020.
• For properties in Class 5 (Light Industry), 6 (Business and Other), and 8 (Recreational Property/Non-Profit Organizations), the penalty date has been extended to October 1, 2020.

3. Burnaby

The City of Burnaby has not extended its due date for property tax payments which remains July 2, 2020, but has extended its penalty date to October 1, 2020.^[4]

4. Coquitlam

The City of Coquitlam has extended its due date for property tax payments to September 30, 2020, and reduced penalties for unpaid amounts from 10% to 5% of the overall amount.^[5]

5. Delta

The City of Delta has not extended its due date for property tax payments which remains July 2, 2020, but has extended its penalty date to October 1, 2020.^[6]

6. Langley - City of Langley

While the City of Langley has not posted publicly on its website about its approach to property taxes and COVID-19, we have confirmed through email with its Manager of Revenue and Business Systems that the payment and penalty date has not changed from July 2, 2020, but that the penalty has changed to 2% (down from 5%) on July 3, 2020, and a further 8% (up from 5%) on October 1, 2020.

7. Langley - Township of Langley (updated)

The Township of Langley has not extended its due date for property taxes, which remains July 2, 2020.

However, in response to COVID-19, Langley voted to revise the regular 10% late payment levied on July 3, 2020 (with the due date on July 2, 2020) using a staggered approach with a lower penalty of 1.75% on July 3, 2020 (for properties in classes 1, 2, 9) or October 1 (for properties in classes 4, 5, 6, and 8), with the remainder, 8.25%, coming much later in the year on November 17, 2020 (first business day after November 15, 2020). This second November 17 penalty date applies to properties in classes 1, 2, 4, 5, 6, 8, and 9. ^[7]

8. Maple Ridge

The City of Maple Ridge has not extended its due date for property tax payments which remains July 2, 2020, but has extended its penalty date to October 1, 2020.^[8]

9. Mission

The District of Mission has not extended its due date for property tax payments which remains July 2, 2020, but has extended its penalty date to October 1, 2020.^[9]

10. New Westminster

The City of New Westminster has not extended its due date for property tax payments which remains July 2, 2020, but has extended its penalty date to October 1, 2020.^[10]

11. North Vancouver - City of North Vancouver

The City of North Vancouver has not extended its due date for property taxes, which remains July 2, 2020.^[11]

However, the City of North Vancouver has adjusted its penalty dates as follows:

• For properties in Class 1 (Residential), 2 (Utilities), and 3 (Supportive Housing), there is a 2% penalty on July 3, 2020, and a further 8% on September 1, 2020.
• For properties in Class 4 (Major Industry), Class 5 (Light Industry), 6 (Business and Other), and 8 (Recreational Property/Non-Profit Organizations), the penalty date has been extended to October 1, 2020.

12. North Vancouver - District of North Vancouver

The District of North Vancouver has not extended its due date for property taxes, which remains July 2, 2020.^[12]

However, the District of North Vancouver has adjusted its penalty date as follows:

• For residential and utility properties, there is a 2% penalty on July 3, 2020, and a further 8% on September 1, 2020.
• For commercial properties and recreational facilities, the penalty date has been extended to October 1, 2020.

In response to COVID-19, the District of North Vancouver notes that "it's as important as ever to pay your municipal property taxes on time. We rely on this revenue to deliver the important municipal services you've come to expect. If your financial situation means you may not be able to pay your property taxes on time, please consider the financial assistance that the provincial and federal governments are making available."

13. Pitt Meadows

The City of Pitt Meadows has not extended its due date for property tax payments which remains July 2, 2020, but has extended its penalty date to October 1, 2020.^[13]

14. Port Coquitlam

The City of Port Coquitlam has extended its due date for property tax payments to September 30, 2020.^[14]

15. Port Moody

The City of Port Moody has not extended its due date for property tax payments which remains July 2, 2020, but has extended its penalty date to October 1, 2020.^[15]

16. Richmond

The City of Richmond has not extended its due date for property tax payments which remains July 2, 2020, but has extended its penalty date to September 30, 2020.^[16]

17. Surrey

The City of Surrey has not extended its due date for property tax payments which remains July 2, 2020, but has extended its penalty date to October 1, 2020.^[17]

18. Tsawwassen First Nation (TFN)

TFN has not extended its due date for property tax payments which remains July 2, 2020, but has extended its penalty date to September 30, 2020.^[18]

19. Victoria

The City of Victoria has extended its due date for property tax payments to August 4, 2020, with a reduced penalty for late payments.^[19]

20. West Vancouver

The District of West Vancouver has not extended its due date for property tax payments which remains July 2, 2020, but has extended its penalty date for businesses to September 30, 2020.^[20]

21. White Rock

The City of White Rock has not extended its due date for property tax payments which remains July 2, 2020, but has extended its penalty date to October 1, 2020.^[21]

Our team will continue to monitor updates to commercial property taxes and provide updates as necessary. If you require any assistance, please reach out to any member of our team