Assessment Practices and Procedures TAARA 1
Tourist Accommodation (Assessment Relief) Act (TAARA)
Last Document Review Date: January 4, 2017
Last Legal Review Date: January 4, 2017
TABLE OF CONTENTS
Executive Summary .............................................................................. 3
Resources ............................................................................................ 3
Legislation ................................................................................... 3
Compliance Checklist ............................................................................ 4
Tourist Accommodation (Assessment Relief) Act ....................................... 5
General ............................................................................................ 5
Exception ......................................................................................... 6
Multiple Lots – One or More Exemptions ............................................... 6
Apportioning a Single TAARA Exemption Among Multiple Properties ......... 7
Class 6 – Business and Other Properties Under Construction ................... 8
TAARA and the Industrial or Business Property Exemption ...................... 8
Strata Property Sample TAARA Calculations Within a Municipality ............. 10
Legislative Formula .......................................................................... 10
Non-Strata Property Sample TAARA Calculations Within a Municipality ...... 10
Legislative Formula .......................................................................... 10
Sample Calculation For a Single Folio ................................................. 11
Sample Coding ................................................................................ 11
Sample Calculation For Multiple Folios ................................................ 11
Sample Coding ................................................................................ 12
Sample Calculation of TAARA Apportionment Within a Strata Complex ... 13
Sample Coding ................................................................................ 14
Legislative Formula for eligible property within a rural area ................... 14
Appendix A: Frequently Asked Questions ............................................... 16
Appendix B: Legal Direction ................................................................. 17
Assessment Practices and Procedures TAARA 2
Downtown Hotel .............................................................................. 17
Legal Direction.............................................................................. 17
Simple Resort Campground ............................................................... 17
Legal Direction.............................................................................. 18
Multiple-lot Hotel ............................................................................. 18
Legal Direction.............................................................................. 18
Hotel with Long-term Stays............................................................... 18
Legal Direction.............................................................................. 18
Assessment Practices and Procedures TAARA 3
EXECUTIVE SUMMARY
The purpose of this document is to provide direction for the consistent application of the exemption available under the
Tourist Accommodation (Assessment Relief) Act (TAARA).
TAARA provides relief by reducing the assessed value of eligible property for the purpose of taxation under designated
Acts, which include the Assessment Authority Act, the British Columbia Transit Act, the Community Charter, the Hospital
District Act, the Islands Trust Act, the Local Government Act,
the Municipal Finance Authority Act, the Police Act, the School Act, the South Coast British Columbia Transportation
Authority Act, the Taxation (Rural Area) Act, the Treaty First Nation Taxation Act, the University Endowment Land Act, and
the Vancouver Charter.
RESOURCES
Legislation
Assessment Act, R.S.B.C. 1996, c. 20, sections 12, 13, 26, 57, 63 and 65
Industrial and Business Property Exemption Regulation, B.C. Reg. 485/83
Prescribed Classes of Property Regulation, B.C. Reg. 438/81
Strata Property Act, S.B.C. 1998, c. 43
Tourist Accommodation (Assessment Relief) Act, R.S.B.C.
1996, c. 454
Tourist Accommodation (Assessment Relief) Regulation, B.C. Reg. 405/88
Assessment Practices and Procedures TAARA 4
COMPLIANCE CHECKLIST
The following is a list of items that must be completed in order to be considered compliant with this document:
1. Apply the TAARA exemption to eligible Class 6 and
improvements used to provide overnight accommodation to guests.
2. TAARA exemptions to be apportioned to eligible Class 6 land
and improvements on the same basis as the valuation is split.
3. If a parcel of land falls in Class 6 but the improvements are
not used for overnight accommodation, do not provide the TAARA benefit. The reverse of this situation, where the
improvements are used for overnight accommodation but the land is not in Class 6, also cannot be provided the TAARA
benefit.
4. Where a tourism operation extends over more than one lot, provide each lot that legally qualifies as an independent
tourism operation with its own separate exemption (assuming that lot meets the qualifications for exemption).
5. Provide qualifying Class 6 properties that are under
construction, assuming the owner demonstrates a sufficient commitment to develop the land for the provision of
overnight accommodation to guests, with the TAARA exemption as soon as the construction phase has
commenced.
6. Where eligible tourist operations operate on more than one folio, including stratified tourist operations, but they only
qualify for a single TAARA exemption, you must manually calculate the TAARA exemption and manually apportion the
exemption between land and improvements.
Assessment Practices and Procedures TAARA 5
TOURIST ACCOMMODATION (ASSESSMENT RELIEF) ACT
General
Apply the TAARA exemption to Class 6 land and
improvements used to provide overnight accommodation to guests.
Where a parcel of land falls into Class 6 but has no
improvements used to provide overnight accommodation to guests, it cannot get the benefit of TAARA. Similarly,
improvements used to provide overnight accommodation to guests cannot get the benefit of TAARA in the absence of
Class 6 land. The definition of eligible property requires that land, with its improvements, be used to provide overnight
accommodation to guests.
The value attributable to the Class 6 property used for this
purpose should first be apportioned on the same basis as the property was valued1
For the purpose of determining the proportion of Class 6 land
which supports campsite/RV pad services and is eligible for an
exemption under TAARA, attribute between three and five percent of the value of the land used to provide overnight
accommodation (e.g., camping) to Class 6 depending on the quality of the site servicing. Better quality site servicing would
justify a percentage at the higher end of the range.
Class 6 property used to provide accommodation includes property that is:
o actually used to provide overnight accommodation to guests (e.g., hotel rooms).
o necessarily ancillary to the provision of overnight accommodation to guests (e.g., the property is
necessary to support the overnight accommodation
1 David Robinson Ltd. v. Assessor of Area 01 – Saanich/Capital (AAB,
1988, dated April 20, 1989); and Assessment Commissioner v. Creative -
Community Developments Ltd. (1980), Stated Case 138 (B.C.S.C.). Contact Assessment Legal for assistance.
Assessment Practices and Procedures TAARA 6
such as hallways, lobbies, check-in areas, parking lots
and offices). o used exclusively by guests (e.g., a hotel swimming pool
or tennis courts).
Subject to the exception set out below, a restaurant, conference centre, pub or other such area (e.g., retail space)
would not get the benefit of TAARA.
Exception
Where a Class 6 accommodation property is in a very remote
location (e.g., a fly-in resort) or the food service is included in
the price of accommodation, the restaurant or food service area would be eligible for relief under TAARA either because
the restaurant is considered necessarily ancillary to the provision of overnight accommodation to guests in the
circumstances or because the area is unlikely to have any customer base other than the guests.
Multiple Lots – One or More Exemptions
The legislation was intended to provide a single exemption to each qualifying tourism operation (e.g., eligible property).
Where tourism operations extend over more than one lot, you must determine whether each lot is eligible for the TAARA
exemption. A lot is eligible for a separate exemption if it legally qualifies as an independent tourism operation, even if
is not being run independently.2
As a general rule, you should consider a property to have an
independent business operation if it has its own business license. For instance, if there is a motel on one parcel and
cabins on a separate parcel, each having its own individual business license, each parcel is entitled to its own separate
TAARA exemption.
2 See: Toth v. Assessor of Area 17 – Penticton (AAB, August 31, 1989);
and Richter Pass Motor Inn v. Assessor of Area 17 – Penticton (AAB, November 26, 1990). Contact Assessment Legal for assistance
Assessment Practices and Procedures TAARA 7
If the tourist accommodation property operates under a single
business license, then to qualify for an additional TAARA exemption, the second or subsequent lot must:
o have its own legal access
o have separately provided and billed municipal services (e.g., water, gas electricity, sewer)
o independently comply with zoning requirements (e.g., for parking)
If these criteria are met, it does not matter whether the lots are under the same or separate ownership, or whether they
are currently operating as a single tourism operation with a single check-in desk. They should be separately assessed and
granted separate exemptions.
Apportioning a Single TAARA Exemption Among Multiple Properties
If the tourism operation qualifies for a single TAARA
exemption (i.e., the most likely scenario) and is located on more than one lot, the exemption may have to be
apportioned among the lots.
For instance, where the assessor separately assesses the separate legal parcels (e.g., because there are no
improvements extending over lot lines, or because the property is a strata hotel and the assessor is required to
separately assess each strata lot), the single TAARA
exemption will be apportioned among the legal parcels that provide overnight accommodation.
Where the improvements on a second or subsequent lot are
not directly used to provide overnight accommodation, but are only necessarily ancillary to the provision of that
overnight accommodation, the TAARA exemption should not be apportioned. In other words, the second or subsequent lot
will only qualify for a portion of the TAARA exemption if it has improvements on it that are actually used to provide
overnight accommodation. For example, if a hotel is on one
lot, and the parking lot for the hotel is on an adjacent lot,
Assessment Practices and Procedures TAARA 8
only the lot with the hotel would qualify for the TAARA
exemption and no apportionment would be necessary.3
Class 6 – Business and Other Properties Under Construction
Class 6 properties under construction may benefit from the
TAARA exemption as soon as the construction phase has commenced and the owner demonstrates a sufficient
commitment to develop the land for the provision of overnight accommodation to guests4. For more guidance on applying
the Intracorp criteria, refer to the Mixed-Use Development Land APP or contact Assessment Legal.
However, where the value of the Class 6 portion of property that will be used to provide overnight accommodation to
guests, once complete, will be such that it does not qualify for TAARA, the TAARA exemption should not be granted to a
partially complete tourist accommodation property.
NOTE
Be aware that the thresholds for TAARA exemption are different
depending on whether the property is located in a municipality or in a rural area.
TAARA and the Industrial or Business Property Exemption
The Industrial and Business Property Exemption Regulation,
B.C. Reg. 485/83 exempts Class 4 – major industry, 5 – light industry or Class 6 improvements on a parcel of land up to a
maximum of $10,000 of the improvements’ assessed value.
This exemption will be reduced by the amount of the TAARA exemption granted to Class 6 improvements, which are used
to provide overnight accommodation to guests.
If the TAARA exemption for the Class 6 improvements is more than $10,000, then the exemption under B.C. Reg. 485/83
does not apply. If the TAARA exemption for the Class 6
3 This is based on a direction contained in a July 20, 1988 All Area Assessors’ memo from John Collins.
4 Assessor of Area 10 – Burnaby/New Westminster v. Intracorp Developments Ltd. (2000), Stated Case 416 (B.C.C.A.)
Assessment Practices and Procedures TAARA 9
improvements is less than $10,000, the exemption under B.C.
Reg. 485/83 applies, but only to the extent necessary to top up the exemption amount to $10,000. If no TAARA exemption
applies, the exemption under B.C. Reg. 485/83 will apply to the full extent of $10,000.
If the Class 6 accommodation property is stratified, the
TAARA exemption will be apportioned among the strata lots in the complex. The $10,000 exemption under B.C. Reg. 485/83
is applicable to the improvements on each strata lot (i.e., this exemption is not apportioned between the strata lots), but
will still be reduced by the amount of the TAARA exemption
allotted to the improvements on each strata lot. Where property is stratified, these two exemptions operate together
so that any Class 6 strata lot should receive a minimum exemption of $10,000 provided the improvement value is at
least $10,000.
Assessment Practices and Procedures TAARA 10
STRATA PROPERTY SAMPLE TAARA CALCULATIONS WITHIN A
MUNICIPALITY
Legislative Formula
A = B (C/D) where,
A = amount of the TAARA exemption,
B = the smaller of the following amounts:
(a) $150,000 less 15 percent of the amount by which the total of the assessed values of all the strata lots
included in the strata plan that are eligible property, is over $2,000,000;
(b) 50 percent of the total of the assessed values of all
the strata lots in the strata plan that are eligible property,
C = the assessed value of the eligible property, and
D = the total of the assessed values of all the strata lots included in the strata plan that are eligible property.
Section 2(3) of the Act states:
If the amount determined under subsection (1) or (2) in respect of an eligible property is a negative amount, no
change is to be made in the assessed value of the eligible property.
NON-STRATA PROPERTY SAMPLE TAARA CALCULATIONS
WITHIN A MUNICIPALITY
Legislative Formula
The reduction in the assessed value of the eligible property is the lesser of the following amounts:
a. $150 000 less 15 percent of the amount by which the
assessed value is over $2,000,000;
Assessment Practices and Procedures TAARA 11
b. 50 percent of the assessed value.
Sample Calculation For a Single Folio
Example: Conventional hotel where the actual value (AV) of eligible property (Class 6 property used to provide overnight
accommodation to guests) is $850,000 (with a hypothetical
split of 30 percent to land value and 70 percent to improvement value).
Calculation “a”: $150,000 …since hotel AV is less than
$2,000,000
Calculation “b”: $850,000 x .5 = $425,000
Total TAARA exemption = $150,000 (lesser of “a” or
“b”)
Portion of TAARA exemption applicable to land = ($255,000/$850,000) x $150,000 = $45,000
Portion of TAARA exemption applicable to improvements = ($595,000/$850,000) x $150,000 = $105,000
Industrial and Business Property Exemption Regulation, B.C.
Reg. 485/83: no exemption applies since the TAARA exemption applicable to the improvement value exceeds
$10,000.
Sample Coding
Where the eligible property is on a single folio, the system will automatically split the exemption between the land and
improvements, provided you:
o apply Class 6 and exempt tax code 08 – tourist accommodation to the eligible property.
o apply the appropriate property class and exempt tax code to the remainder of the property.
Sample Calculation For Multiple Folios
Example: Conventional hotel on two folios where the actual
value (AV) of eligible property (Class 6 property used to
Assessment Practices and Procedures TAARA 12
provide overnight accommodation to guests) on Lot A is
$500,000 and on Lot B is $1,000,000 (with a hypothetical split of 30 percent to land value and 70 percent to
improvement value).
Calculation “a”: $150,000 … since hotel AV is less than $2,000,000
Calculation “b”: $1,500,000 x 0.5 = $750,000
Total TAARA exemption = $150,000 (lesser of “a” or “b”)
Portion of TAARA exemption applicable to Lot A =
($500,000/$1,500,000) x $150,000 = $50,000
Portion of TAARA exemption applicable to Lot B =
($1,000,000/$1,500,000) x $150,000 = $100,000
Portion of TAARA exemption applicable to land on Lot A = ($150,000/$500,000) x $50,000 = $15,000
Portion of TAARA exemption applicable to improvements on Lot A = ($350,000/$550,000) x $50,000 = $35,000
Portion of TAARA exemption applicable to land on Lot B
= ($300,000/$1,000,000) x $100,000 = $30,000
Portion of TAARA exemption applicable to improvements
on Lot B = ($700,000/$1,000,000) x $100,000 = $70,000
Industrial and Business Property Exemption Regulation, B.C.
Reg. 485/83: no exemption applies since the TAARA exemption applicable to the improvement value on both lots
exceeds $10,000.
Sample Coding
Where the eligible property qualifies for a single TAARA exemption and is on more than one folio, you must manually
calculate the TAARA exemption and manually apportion the exemption between land and improvements as above.
Assessment Practices and Procedures TAARA 13
o Apply Class 6 and exempt tax code 94 – tourist
accommodation strata exemption to the eligible property as an override.
o Apply the appropriate property class and exempt tax code to the remainder of the property.
o Do not apply exempt tax code 08 – tourist accommodation in these circumstances.
Sample Calculation of TAARA Apportionment Within a Strata Complex
Example: Strata hotel unit (C) where the actual value (AV) of the eligible property (Class 6 property used to provide
overnight accommodation to guests) is $100,000 ($80,000 for the improvement value and $20,000 for the land value).
Strata hotel complex (D) where the actual value of all the
eligible property in the 22-unit complex is $2,200,000.
Solving for “B”:
$150,000 – (($2,200,000-$2,000,000) x 0.15) = $150,000 – $30,000 = $120,000 …this amount is
smaller than 50 percent of $2,200,000.
Solving for “A”:
$120,000 x ($100,000/$2,200,000) = $120,000 x
0.045 = $5,400.
Portion of TAARA exemption applicable to individual
strata hotel unit (C) = $5,400
TAARA exemption applicable to land = ($20,000/$100,000) x $5,400 = $1,080
TAARA exemption applicable to improvements = ($80,000/$100,000) x $5,400 = $4,320
Industrial and Business Property Exemption Regulation, B.C.
Reg. 485/83: $10,000 – $4,320=$5,680.
Assessment Practices and Procedures TAARA 14
Sample Coding
Where the eligible property (a strata complex) qualifies for a
single TAARA exemption and is on more than one folio, you must manually calculate the TAARA exemption and manually
apportion the exemption between land and improvements as
above.
o Apply Class 6 and exempt tax code 94 – tourist accommodation strata exemption to the eligible
property as an override. o Apply the appropriate property class and exempt tax
code to the remainder of the property. o Do not apply exempt tax code 08 – tourist
accommodation in these circumstances.
Legislative Formula for eligible property within a rural area
A = B (C/D) where,
A = amount of the TAARA exemption,
B = the smaller of the following amounts:
(a) $500,000 less 15 percent of the amount by which the
total of the assessed values of all the strata lots included in the strata plan that are eligible property, is over $4,000,000;
(b) 50 percent of the total of the assessed values of all the
strata lots in the strata plan that are eligible property,
C = the assessed value of the eligible property, and
D = the total of the assessed values of all the strata lots
included in the strata plan that are eligible property.
Section 2(3) of the Act states:
If the amount determined under subsection (1) or (2) in
respect of an eligible property is a negative amount, no change is to be made in the assessed value of the eligible
property.
Assessment Practices and Procedures TAARA 15
NOTE
The sample calculations provided in the previous sections for strata and non-strata properties within a municipality can be re-
calculated using the appropriate formula above to calculate the exemptions for strata and non-strata properties within a rural
area.
Assessment Practices and Procedures TAARA 16
APPENDIX A: FREQUENTLY ASKED QUESTIONS
Question
What Class 6 land will get the benefit of TAARA?
1. Answer
Only that Class 6 land with Class 6 improvements that are
o actually used to provide overnight accommodation to guests (e.g., a hotel),
o ancillary to the provision of overnight accommodation (e.g., showers), or
o used exclusively by the overnight guests,
will get the benefit of TAARA.
Question
If a property used to provide overnight accommodation to
guests has only de minimus improvements (e.g., a rustic
campground), do those improvements and the associated land it qualify for TAARA?
2. Answer
No. Because de minimus improvements are ignored, there
would be no Class 6 land associated with these improvements and therefore nothing to attract TAARA.
Question
Does TAARA apply to property used as a marina?
3. Answer
If the marina is used to provide overnight accommodation to
guests (i.e., the boaters tie up and stay overnight), TAARA can be applied to the Class 6 land and improvements which
are used for overnight accommodation (e.g., wharves and docks, shower or laundry buildings, office).
Assessment Practices and Procedures TAARA 17
APPENDIX B: LEGAL DIRECTION
Downtown Hotel
A 300-room, non-stratified hotel is located on one downtown
lot and is entirely within Class 6. Amenities include a swimming pool and gym for use by hotel guests only. The spa
gives preference to hotel guests but is open to the public. The hotel also has a lounge, two restaurants and several
conference rooms that are available for use by hotel guests and members of the public. A number of parking spots in the
underground lot are reserved solely for use by the hotel guests; the remainder provides pay parking for the public
whether or not they are using hotel facilities.
Legal Direction
The hotel qualifies for a single TAARA exemption. The hotel rooms and any necessarily ancillary property such as the
lobby, check-in area, designated guest parking, offices and hallways are eligible property for the purposes of TAARA.
The swimming pool and gym also qualify because they are used exclusively by the hotel guests.
The spa, lounge, two restaurants, conference rooms and
remainder of the parking lot do not qualify as eligible property and cannot benefit from TAARA.
Simple Resort Campground
The tourist accommodation operation consists of one lakefront lot and one adjoining upland lot; water lines, but
nothing else, extend across the interior lot lines. The lakefront lot contains a non-stratified, 10-unit motel with paved
parking, and the owner’s residence. Although the lakefront lot has highway frontage, there is no legal access from the
highway. The lakefront lot is accessed by an unpaved road through the upland lot. The upland lot contains a basic
campground with campsites, a few un-serviced RV pads,
unpaved roads, a hut that serves as an office, and outhouses. The motel and campground operate under one business
license.
Assessment Practices and Procedures TAARA 18
Legal Direction
If the only improvements extending across the lot lines are water lines, then the lots should be separately assessed.
Apportion a single TAARA exemption between the two lots, applying it to all the Class 6 land and improvements, which
in this instance, are all necessarily ancillary to the provision of overnight accommodation (e.g., the motel
parking lot, the office, access roads shared by campers
and motel guests).
Multiple-lot Hotel
The property is comprised of two adjacent lots with a
separate hotel building on each lot. The lots have separate municipal services and separate parking lots. The municipality
issued a separate business license in respect of each lot, but the buildings have been joined by a passage on the second
floor. The second lot has a pub with rooms above which can only be accessed through the first lot. The first lot contains
hotel rooms, a lobby, restaurant and lounge.
Legal Direction
Assess the two lots separately and grant a TAARA exemption to each lot.
Apply the TAARA exemption to the hotel rooms and any
necessarily ancillary property such as the lobby, check-in area, parking, offices and hallways.
The pub, restaurant and lounge do not qualify as eligible property and cannot benefit from TAARA.
Hotel with Long-term Stays
A 100-room hotel with a restaurant and gym extends across two lots. Both the gym and restaurant are available for use by
the public as well as the hotel guests. Twenty-five of the hotel rooms are dedicated to long-term (e.g., monthly) stays.
Legal Direction
Assess the two lots as a single parcel because the hotel
extends across the interior lot line and apply a single TAARA exemption.
Assessment Practices and Procedures TAARA 19
Place the area of the hotel designated to long-term stays
(along with a proportionate amount of land) in Class 1 – residential.
The remaining rooms and necessarily ancillary property such as hallways, check-in area, offices, parking and lobby
should be placed in Class 6 and will qualify as eligible property for the purposes of TAARA.
The gym and restaurant will not qualify for the TAARA exemption because they are not used exclusively by the
hotel guests.
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