Chilliwack officials have spent a lot of time trying to close what’s become known as the ‘llama loophole.’
The issue hit the floor at the recent conference of Union of B.C. Municipalities, the upshot of a Chilliwack property owner who put llamas on an industrial property in order to be assessed at a much lower agricultural tax rate.
The problem is that system is not designed for industrial land owners to make it look like agricultural land for just long enough to provide a tax break, said Coun. Sue Attrill.
“Taxation has to be based on actual use,” she said.
Attrill was the city councillor who brought the made-in-Chilliwack resolution to the UBCM conference floor, where it passed with a fairly close vote in Whistler last week.
The UBCM will now ask the province to amend the Assessment Act so that land could not be “reclassified” for farm use if it’s already zoned for commercial, industrial or other business purposes. In other words, it can’t be reclassified as ag land, unless the farm use actually “pre-dates the zoning, is the principal use, and the lands are continuously used for farm purposes,” according to the resolution.
Those extra criteria when incorporated into legislation should close the loophole for good.
Chilliwack officials estimated the “llama loophole” also nicknamed “llama-gate” by pundits cost Chilliwack $250,000 in lost tax revenues, which had to be recouped “off the backs” of the rest of Chilliwack taxpayers.
“What happens now is the resolution goes to the provincial government,” said Attrill. “But what it means is that the first steps are in place in order to make this right.”
BC Assessment officials made it clear they couldn’t change how they did business without a formal change to the legislation.
Mayor Sharon Gaetz said some may not have realized at the time that the situation meant that the rest of the taxpayers would be paying for the brunt of llama-gate. The situation may have had some applauding the property owner’s “craftiness” by adding the livestock, since the taxes in that case were effectively reduced by 98 per cent that year, with the help of the loophole, Gaetz said.
“But there was gravel on the site, and it was being marketed as industrial,” she noted.
Chilliwack makes a point of “highly subsidizing” its farm land, which is meant to support actual farmers and agricultural producers.
But with this unprecedented situation, they were faced with either cutting city services, or shifting the tax burden to recoup the significant revenue losses from the llama loophole.
When the legislation is rewritten, it will mean that lands cannot be reclassified as farm land, when they’re already zoned for other uses, unless farm use predated the zoning, is the principal use on the property, and those ag lands are continuously used for farming.
The 2014 UBCM Convention was held September 22-26 in Whistler.