How undervaluation of Vancouver sites could cost millions in property taxes

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 Press

by Canadian Press

How undervaluation of Vancouver sites could cost millions in property taxes

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