Commercial & Business Occupancy Tax

Commercial

• includes all property or part thereof except residential property and resource property; this includes forest property owned by a person who owns fifty thousand acres or more
• the Commercial Rate for the Fiscal Year 2008-2009 is $2.14 per $100 of assessment
• the 2008 Taxable Commercial Assessment for the Municipality is $198,530,400

Business Occupancy

• the Business Occupancy Rate for the Fiscal Year 2008-2009 is $2.14 per $100 of assessment
• the 2008 Taxable Business occupancy Assessment for the Municipality is $34,351,600

What is business occupancy assessment?

According to the Assessment Act, every person occupying or using any commercial property shall be assessed for a sum to be called business occupancy assessment. There are some exceptions which are outlined in the Assessment Act .

When commencing a business you must provide the following information to the Property Valuation Services Corporation (PVSC) :

• the type and name of the business
• mailing address
• location of the business
• square footage occupied
• rent paid (where applicable)
• start date

The assessed business occupancy owner is required to notify their local PVSC office within 7 days of any opening and within 30 days of a closing or change in space occupied.

Is business occupancy assessment being phased out?

As a result of requests by Nova Scotia municipalities and representatives from the business sector, the Province amended the Municipal Government Act, ( Bill No. 191 ), (to allow for the phasing out of business occupancy tax over several years.

There are 3 categories of business occupancy assessments: 25 %, 50%, and 75%. The category your business is in determines when you will stop receiving business occupancy assessments and stop paying business occupancy tax.

When will business occupancy assessments and the Business Occupancy Assessment Tax cease?

The legislation defines different schedules for the phase out of business occupancy assessments and the Business Occupancy Assessment Tax, depending on the type of business. The following table gives the schedule of the phase-out by category of business.

For example: If the real property assessment for an occupied space in the 50% category is $100,000 in 2005, the Business Occupancy Assessment is calculated as follows: $100,000 x 50% = $50,000 In 2008, the Business Occupancy assessment will be calculated by multiplying the Real Property Assessment by 20%; in 2009 by 10%, until Business Occupancy Assessments are eliminated in 2010.

Who receives a Business Occupancy Assessment?

Any tenant or property owner who occupies or uses commercial space in a category not yet eliminated receives a Business Occupancy Assessment.

What do I do if I'm starting a new business?

You are required to contact your local  PVSC office within one week of opening your business.

What about changes to my business?

If you make changes to your business such as name, address, change in space occupied or ownership, your local  PVSC office will require notification within 30 days.

I'm planning on vacating my business premises. What now?

Let us know by contacting your local  PVSC office within 30 days of vacating your business premises. That way, your Business Occupancy Tax will be adjusted by the municipality.
For example, a business that vacates or decreases space on May 1st and notifies the local PVSC office before June 1st is entitled to an adjustment of their tax bill by the municipality.

Am I exempt from Business Occupancy?

There are a few exemptions. If you occupy property for any non-profit community, charitable, fraternal, educational, religious, cultural or sporting organization or institution, you will not be assessed for a Business Occupancy.

Who determines the Business Occupancy Tax?

Municipalities use assessment information to help them determine business occupancy taxes.

Can I appeal my Business Occupancy Assessment?

Yes. You'll receive written notice of your Business Occupancy Assessment in January or February of each year and you may appeal it within 21 days after the notice has been served. These notices are delivered by regular postal service and are considered served as of the date they are mailed. Special notices such as those resulting from opening a business part way through the year, are delivered by registered mail and are considered to be served on the date they are received. For example: If the regular assessment notices are postmarked February 1, appeals must be received by the  PVSC office no later than February 22. If a business that has recently opened receives and signs for a notice of assessment by registered mail on November 1, the appeal must be received by the  PVSC office no later than November 22.

I'm not sure which of these categories my business fits into. How can I find out?

Contact your local  PVSC office.

I'm late getting my business information to the Regional Assessment Office. What do I do now?

Up-to-date information is required in order to provide clients with accurate assessment information. Please contact your local PVSC  office right away with the correct information.

How does Business Occupancy impact a landlord who pays municipal taxes associated with the Business Occupancy on behalf of a tenant as part of an overall lease?

Bill No. 191  contains a provision that allows a landlord to re-open a leasing agreement for the purpose of recovering increased taxes associated with the phase-out of the Business Occupancy Assessment Tax. This applies only in circumstances where a landlord directly pays municipal taxes on behalf of a tenant and has calculated this cost into an existing lease.

Bill No. 191 also allows for a one-time request by a tenant for information on their individual Business Occupancy assessment in order to determine if a landlord is making a fair and adjustment in rent. The landlord can obtain information on the full Business Occupancy for the whole building so that they can calculate the adjustments. Clients should contact their local  PVSC office for this information.

General Assessment Questions

Q. What is a property assessment?

A. A property assessment is an estimate of a property's market value as of a specific date.

Q. How are assessments calculated?

A. Unlike property appraisals which are done on individual properties, assessments are calculated using a mass appraisal approach. Assessment has a very large database in which a record is kept of the characteristics of every property in the province. This information gets updated through various means: building permits, property inspections and sales investigations. The Department analyzes sales of properties and runs a statistical analysis to determine what different types of properties are selling for in different areas. Then the information is applied to properties with similar characteristics to determine their market value as of a specific date in time.

Q. Is my property assessed every year?

A. Yes. Your property is assessed every year as of a certain date. Annual assessments enable the Department to update assessment values to reflect more current market trends and to more accurately account for changing real estate market conditions.

Q. Why are assessment values based on dates two years back? Why not base them on this year's market value?

A. Unlike property appraisals, which are done one at a time and based on the market on the exact date of the appraisal, property assessments are done on a mass appraisal basis. All property assessments are based on the same date to ensure fairness. It takes time to collect data on properties, investigate property sales and analyze and interpret that information for every property in Nova Scotia. Therefore, all property assessments are based on market value at the 1st of January two years before the current assessment year. 2007 property assessments are based on market value of January 1, 2005.

Q. What information can I have access to?

A.  Property Valuation Services Corporation has a huge data base that contains detailed information on every property in the province. Typical information they have on a residential property would include the size of the land, the building's age and measurements, the number of rooms, bathrooms, quality of materials used, type of roof, and any unique qualities your property or house has that may affect its market value. All of this information is available to the owners of the property. 2007 assessment notices for residential properties include a Personal Identification Number (PIN) along with the Assessment Account Number (AAN). By entering this information at Property Assessment Online you can look up assessment information about your property.

Q. How is my property assessment different from an appraisal?

A. A property assessment is an estimate of a property's market value as of a specific date. The 2007 assessment is an estimate of your property's market value at January 1, 2005. If you were to get an appraisal for your property today, it would be an estimate of your property's market value as of today's date.

Q. How does the PVSC get its data?

A. Property Valuation Services Corporation has a very large database in which a record is kept of the characteristics of every property in the province. Typical information they have on a residential property includes the size of the land, the building's age and measurements, the number of rooms, bathrooms, quality of materials used, type of roof, and any unique qualities your property or house has that may affect its market value.  PVSC gets this data through various means, including building permits, property inspections and sales investigations. For example, if your property is under construction, a physical inspection is done to ensure that they have the most up-to-date information.

Q. Why does PVSC assess properties at market value?

A. According to the Nova Scotia Assessment Act, all properties must be assessed at market value. The market value approach to assessment is the most equitable and widely accepted system in North America. Every province in Canada uses this approach, as do most assessment jurisdictions in the United States and most other countries. Market value is widely accepted for the following reasons:
It is easily understood by most property owners
It is a transparent process, allowing property owners to test fairness by comparing their assessment to sales of similar properties.
Market value allows the same appraisal standards and principles to be applied to all residential properties across Nova Scotia.

Q. How do I find out more information about assessments?

A. Information is available online at Property Assessment Online . If you have other questions or wish to obtain more information about your property assessment, please contact your local  PVSC office.