Many homes in the Greater Vancouver area built before 1957 were originally heated with furnace oil.

Author; Tony Spagnuolo - Spagnuolo LLP 

When natural gas became available, the oil storage tanks, which were normally located underground in backyards, were filled with sand or capped. However, as these unused tanks start to corrode and rust, the remaining oil can leak out and flow onto the rest of the owner’s property, the neighbour’s property, storm sumps and waterways, resulting in contamination of soil and water. Apart from the negative financial impact on the market value of the property, the owner can face substantial legal liability under various statutes and bylaws for such contamination.

The BC Fire Code and by-laws of twelve municipalities (including the City of Vancouver) all essentially require that out-of-service underground oil storage tanks (“UST”) be removed and that all contaminated soil must be removed and replaced with clean fill

A very limited exception may be granted by the fire authority where the removal of the UST is impractical because it is located under a permanent structure or its removal would endanger the structural integrity of nearby buildings. In that case, the owner would still have to render the UST “inert” in accordance with “good engineering practices” which would include arranging, at their own expense, for the remaining oil to be pumped out, for the tank to be filled with sand and all piping to be capped as well as arrange for the removal of contaminated soil and replacing it with clean fill. In addition, written verification of such work must be provided by a licensed contractor to the fire authority.

The responsibility for the removal of the UST and remediating any contamination falls on the current property owner. The costs of such removal can be expensive depending on how much remediation work is involved. However, if the UST is ignored and not dealt with promptly and correctly, the costs can be exponentially more. In one case that was reported in 2008, an owner of a West Vancouver home, who bought the home in 2000 not apparently aware that there was a buried UST, had to spend close to $160,000 to remove 5,000 litres of contaminated fuel from a leaky home-heating UST that had not been used in 25 years! Such cases are rare but it does highlight the need to conduct due diligence when buying a home that may have an unused UST.

In addition to the BC Fire Code and municipal by-law requirements, the owner may also be subject to the Environmental Management Act of BC if the concentration of the contaminants present in the soil or groundwater exceeds the allowable limits prescribed for residential properties and therefore meets the definition of a “contaminated site”. In that event, the owner can be ordered to undertake remediation of the property and neighbouring properties if the contamination has spread. It may be possible for the owner to recover some of the costs incurred from more culpable previous owners through a “cost recovery action” pursuant to the Environmental Management Act but only if they can be found and have the resources to pay. An owner or former owner may also be found liable under common law nuisance for failing to take steps to prevent seepage of oil to neighbouring properties.

What are the Seller’s obligations?

The Seller normally will provide a prospective buyer with the Property Disclosure Statement (“PDS”) that requires disclosure of a number of potential defects, including the presence of an UST. If the Seller declares that the property does not to their knowledge contain an UST and/or is not contaminated, which later proves incorrect, the Seller can be liable for negligent misstatement. Moreover, if the PDS is expressly stated to form part of the Contract and there is an unqualified statement that there is no UST then this becomes an actual warranty so that if an UST is discovered on the property the Seller will be liable for breach of contract. Similarly, if the Seller states expressly in the Contract that there is no contamination at the property, the Seller will be contractually liable to the Buyer if contamination is discovered. As well the courts have held that Sellers have a duty to disclose a latent defect that could be dangerous or a hazard to human health and failure to do so may well make them liable to the Buyer for damages sustained as a result of their failure to warn.

In summary, if there is an UST, then the Seller should be advised to disclose this fact to the Buyer and ensure their representations are accurate. The Seller can then go ahead and arrange for a qualified tank removal contractor to remove the UST and clean up any contamination in accordance with all permits and applicable statutes, bylaws and BC Fire Code and provide sufficient written proof to the Buyer prior to completion. Alternatively, if the Seller does not have the money to do this, they could try and negotiate a price reduction in exchange for a release and indemnity from the Buyer with respect to the UST and remediation of any contamination. However, the Seller can still remain liable under the EMA and the Buyer may not be able to agree to this because of the requirements of their insurer and lender, who will want the UST and any resultant contamination issues dealt with prior to completion before funds are committed.

What can Buyers do to protect themselves?

If there is a suspicion that there may be an UST and the Seller will not or can not confirm either way, the Buyer should be advised to make the offer subject to a satisfactory inspection that satisfies the Buyer there is no UST and that the property is not a contaminated site. It would be prudent to engage the services of a specialized UST inspector to conduct a magnetic survey to detect an UST and then, if located, the integrity of the tank can be examined and surrounding oil can be checked for the presence of contaminants. The Buyer should also put in another condition precedent into the Contract that, if there is an UST, the offer is subject to the Seller arranging, at their own expense, for the UST to be drained and removed and for the soil and groundwater to be assessed for contamination and, if so contaminated, the Seller will ensure the soil and groundwater is fully remediated in compliance with all applicable statute, bylaw and BC Fire Code requirements. The contract should also provide that it is a fundamental term of the contract that all the work will be done by a qualified tank removal contractor and that the Seller shall provide to the Buyer on or before the completion date all necessary written certificates and reports from the tank removal contractor and the fire authority that all work was completed in compliance with the applicable statutes, bylaws and BC Fire Code.

A Buyer should be strongly advised, even in the face of competing offers for a property, to not remove any conditions without the UST and remediation work having been completed properly by the Seller. Similarly, the Buyer should not agree to take on the responsibility of the removal of the UST and the remediation of any contamination in exchange for a price reduction without fully realizing the potential liability that would ensue upon becoming the new owner.

Insurance issues

As insurance companies are worried about the potential impact and expense of any environmental contamination caused by a leaking corroded oil tank, it is very hard to obtain home insurance for homes which have an exterior oil tank older than 15 years. Even if home insurance is obtained, there will undoubtedly be a leakage/pollution exclusion which would make the property owner bear the full costs of such an event. Another scenario may be that as a condition of providing insurance the owner must remove the oil tank within 30 days of the policy been issued which again will result in a big cost for the owner to pay.

Also, an owner will not be able to obtain financial protection from a residential title insurance policy as the policy will have exclusion for any environmental damage, including that caused by a leaking oil tank even if the owner had no idea the oil tank was there.

Financing Issues

For commercial real estate, lenders are much more focused on environmental issues, depending on the history and the previous uses of the land, and sometimes will require special environmental reports to be obtained before they will commit to funding a transaction. However, even for residential transactions concerning a known UST, the lender will normally insist, before approving any funding commitment, that the UST to be removed in accordance with the applicable statutes, bylaws and BC Fire Code and for the soil to be tested for contamination and remediated as necessary. In such a situation, a prospective buyer should not remove any financing condition until they receive written confirmation that the lender has approved of the UST removal and remediation process, is satisfied with all required reports issued by the tank removal contractor and is still prepared to provide mortgage financing for the purchase.

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The information you obtain at this site is not, nor is it intended to be legal advice.  You should consult a lawyer for individual advice regarding your own situation.

The dollar figure on your provincial property assessment notice may not accurately reflect the market value of your home. Let's explore the disparity between BC assessment value and market value, and delve into the factors that influence these figures.

BC Assessment:

BC Assessment provides a value used by the government to determine property tax amounts in British Columbia. These assessments are typically conducted based on data from the previous July, with the current assessment being calculated from July 2024. While BC Assessment serves as a foundational element for taxation, its impact on the real estate market itself is not necessarily significant.

How are BC Assessment values determined?

Given the impracticality of appraisers physically visiting every property, they instead rely on key property characteristics that heavily influence home value. These assessments are typically based on data collected from the previous July, which may sometimes result in slight discrepancies.

Factors considered in the calculation include:

• Comparable Sales

• Lot Size

• Size of the property

• Location of the property

• Property Age

• Any additional features (i.e., garage, view)

The impact of BC Assessment on property taxes is not as significant as one might think. While your BC assessment value is considered, property taxes are primarily influenced by the overall area's needs, such as garbage collection and street maintenance. Lowering taxes could affect service delivery, highlighting the delicate balance between tax rates and essential community services.

What does a BC Assessment mean for homeowners?

For first-time buyers and some sellers, a decrease in assessed property value can raise concerns. While lower assessments may affect mortgage renewal, it doesn't always reflect the market value. Good credit and staying with the same lender can help ease concerns.

What is Market Value?

Market value is the benchmark used by real estate professionals, lenders, and buyers to gauge a property's worth in the current market. It reflects the price a qualified buyer would likely pay for the home at present.

Real estate agents often do a comparative market analysis (CMA) to evaluate a property's current value,. Using the CMA method, agents analyze recently sold homes similar to the subject property in the local area. By considering the sale prices of these properties, they derive a competitive listing price for the property they are selling. Similarly, buyer agents rely on a home's market value to establish a reasonable offer price for their clients.

What are the advantages of getting an appraisal?

• An appraisal offers an accurate estimate of your property's market value, essential for various situations, including When purchasing a property, an appraisal in your conditions safeguards you against potential issues affecting the sale price, allowing you to withdraw from the sale if necessary.

  • When selling, an appraisal provides a realistic asking price, preventing unrealistic expectations.

  • Lenders and financial institutions require an appraisal to ensure borrowers do not over-borrow when buying or refinancing a property.

The key distinctions between Assessed Value and Market Value:

• Physical Inspection vs. Online Assessment: Market value is determined through physical visits to the property, providing a comprehensive understanding, whereas assessed value relies on online assessments, lacking the physical presence aspect.

• Consideration of Factors: Market value takes into account a wider range of factors, resulting in a more precise valuation of the property.

• Timing and Real-time Evaluation: While BC assessment happens annually on July 1 of the preceding year, leading to a time delay, market value assessment occurs in real-time, reflecting current market conditions.

A property assessment serves various purposes, primarily for taxation. However, it's crucial to note that it's an estimate and may differ from the actual market value of the home. While it plays a role in real estate transactions, the focus remains on the market value, which can vary significantly. The assessment value can assist in determining a reasonable starting sale price, as it's publicly available information, providing a safety net for buyers to avoid overpaying for a property.

Author: Tony Spagnuolo - Spagnuolo LLP

The B.C. Government has recently proposed a home flipping tax (the “Home Flipping Tax”) that will take effect starting January 1, 2025, subject to approval by the legislature. This tax, when passed, will apply to income from the sale of a property, including presale contracts, in British Columbia if the property was owned for less than 2 years. 

The Home Flipping Tax is separate and distinct from the federal property flipping rules and is not harmonized or administered with the federal or BC Income Tax. The stated intent is to discourage short-term holding of property for profit.

Who is subject to the Home Flipping Tax?

The Home Flipping Tax technically applies to BC residents and non-residents who sell their property on or after January 1, 2025. Tax will be payable on any gain or income earned from the sale of the property if the property was purchased less than two years before the sale, subject to any exemptions.

Importantly, the legislation as drafted includes a provision that property purchased before January 1, 2025 may be subject to the tax if sold on or after January 1, 2025 and owned for less than 2 years, unless an exemption applies.

Exemptions

There are certain exemptions contained in the legislation, including:

• Certain First Nations land;

• Certain entities (such as a First Nation, a registered charity, a municipal entity);

• Life Circumstance exemptions, such as:

  • Death, serious illness, and divorce;

  • Bankruptcy, expropriation and foreclosure.

• Transactional exemptions, such as:

  • Related party transactions; 

  • Commercial use and developer exemptions; and

  • Renovation or construction of additional housing units.

The above list is provided for illustrative purposes only and is not exhaustive. For a full list of exemptions please see here: https://www2.gov.bc.ca/gov/content/taxes/income-taxes/bc-home-flipping-tax/exemptions

Relevant properties

The Home Flipping Tax applies to residential properties as well as presale contracts. It also includes assignments of presale contracts.

Presale Contracts

The original buyer of a presale contract (ie., the person that purchased the contract from the developer) will be considered to have acquired the contract on the date that the presale contract was entered into.

An assignment buyer of a presale contract (ie., a person that acquired the presale contract from another person) will be considered to have acquired the contract (or the eventual unit) on the date the assignment was completed.

Completion of the presale contract does not restart the clock for the purposes of the Home Flipping Tax. 

If the presale contract is assigned within two years of the date the presale contract was entered into, the Home Flipping Tax will apply. 

In other words, for the purposes of the two-year window contained in the Home Flipping Tax, the relevant starting date is when the person acquired their right in the unit.

How the Home Flipping Tax is Calculated

The Home Flipping Tax applies to net taxable income from the sale of taxable property that was owned for less than two years.

The tax is calculated by multiplying your net taxable income by your tax rate. Net taxable income is your taxable income less the primary residence deduction. Taxable income is calculated as your proceeds from the sale of the property, minus the cost to acquire the property and any eligible costs paid or payable by you to improve the property while you owned it.   

The tax rate is 20% of income earned from a property sold within 365 days. At 730 days, the tax no longer applies.

Primary residence deduction

If you sell your primary residence and you owned the property for less than 730 days, you may be able to claim a deduction of up to $20,000 from your taxable income if you meet the following conditions:

• You owned the property for at least 365 consecutive days before you sold it

• The property includes a housing unit that you lived in as your primary residence while you owned it

A primary residence is defined as the place you lived in longer than any other place during the time you owned the residence. The primary residence deduction isn’t available when you assign a presale contract.

AUTHOR: PATRICK PENNER, LOCAL JOURNALISM INITIATIVE REPORTER ● ENVIRONMENT, INFRASTRUCTURE, PORT MOODY ● MAY 13, 2024

BC Hydro has initiated plans to dismantle the Burrard Generating Station.

The Burrard Facility Dismantling Project is still in its earliest phase, and the crown corporation is working out the scope and cost estimates for deconstruction and site remediation, according to BC Hydro.

“After 62 years of service, the Burrard facility in Port Moody is reaching end-of-life,” BC Hydro told the Dispatch. “The dismantling of the Burrard facility will ensure the site can be made safe, secure, and environmentally suitable for future use.”

Although no decisions have been made regarding the future uses at the 193-acre site on Port Moody’s northwest shores, BC Hydro said the project will help guide future deliberations.

Initial work will focus on understanding site conditions, specifically the extent of contamination on the site and identifying archaeological resources.

The British Columbia Utilities Commission had directed BC Hydro to develop a detailed decommissioning and remediation plan regarding the old facility in January, according to Port Moody-Coquitlam MLA Rick Glumac.

Glumac said he envisions an innovative clean energy future for the site, allowing for the creation of green jobs for the province.

“A lot that needs to be done to prepare the site for future uses,” Glumac said. “It’s exciting to me to see that we’re going to the next step here.”

The City Port Moody has been anxiously awaiting any news from BC Hydro regarding what is planned for the property.

The city’s recently released draft of the 2050 Official Community Plan suggests working with BC Hydro and other energy partners to identify possible “spinoff activities” to re-establish industrial uses.

When the station was decommissioned in 2016, Port Moody residents suffered a significant property tax spike of over 3 percent, according to Mayor Meghan Lahti.

Although the city received a grant in lieu of taxes following the closure, Lahti said this was not sustainable.

“The city took quite a large hit. It was $1.4 million worth of tax dollars,” she said. “We want to see something happen out there simply because it’s important for us to have a diverse tax base.”

Port Moody has been struggling with a dramatic loss of its industrial tax base in recent decades, which is one cause of its spiking residential tax rates.

Since 1993, property owners have seen their share of the city’s tax base rise from 48.4 percent to 67 percent, while taxes from major industries have been halved, falling from 33.7 percent to just 16.8 percent in 2024.

Council endorsed an industrial land strategy in March to guide the retention and expansion of its industrial and light industrial zoned lands.

Lahti said BC Hydro’s site is extremely valuable for industrial purposes due to being very well serviced by rail, gas and electric infrastructure, and a deep-sea port.

“We have this amazing deep-sea port sitting there that isn’t being used,” she said. “There’s definitely potential out there.”

BC Hydro said they have begun the process of notifying First Nations and other key public stakeholders about the project, stating they are developing a collaborative approach to consultation.

Contractors will be sought for input regarding dismantling, work methodology, timelines and costs, BC Hydro added.

One possibility for the site is green hydrogen production, which has been gaining momentum in the U.S., according to Glumac.

In October 2023, the U.S. Department of Energy announced up to $1 billion in federal funding over nine years for a Pacific Northwest hydrogen energy hub spanning Washington, Oregon and Montana.

Glumac, who is B.C.’s representative to the Pacific Northwest Economic Region, said he has been working to strengthen cross-border economic ties, and the province is looking to identify potential sites.

The Burrard Generating Station began operations in 1962, with six 150-megawatt natural gas-powered generating units and a switchyard.

In 2013, the BC Liberals announced the station would stop generating electricity in 2016 as part of a provincial strategy to cut electricity costs.

At the time, the facility provided approximately 7.5 percent of B.C.’s electricity (enough power for around 700,000 homes), but the province said it was inefficient and $14 million would be saved annually by its closure.

Keeping it open would require $400 million in upgrades to its decades-old gas-conversion technology, the province said at the time. 

Although emissions upgrades were installed in the 1990s, pollution from the plant remained a significant environmental issue in the early 2000s.

When the station was decommissioned, four of its six generating units were converted to provide voltage stability to the Lower Mainland’s power grid during peak load periods.

Glumac said the BC Liberals did not put a strong plan in place for the site’s future, adding an amendment to the Clean Energy Act has opened up opportunities.

“It has taken time,” Glumac said. “I’m hoping the momentum will pick up on this as we get going, but it’s a pretty exciting development.”

Last updated on May 9, 2024

Like many jurisdictions, B.C. is regulating short-term rentals to help return more short-term rental units into homes for people. Learn more about B.C.'s Short-Term Rental Accommodations Act and regulations on this page.

On this page:

• Overview of B.C.'s Short-Term Rental Accommodations Act 

• Timeline

• Returning short-term rental units to the long-term market

• Strengthening local government tools to enforce short-term rental bylaws

• Establishing Provincial oversight of short-term rentals

• Short-term rentals versus tenancies

• News releases

Overview of B.C.'s Short-Term Rental Accommodations Act

B.C. is facing a housing crisis, with a shortage of all forms of attainable housing, including long-term rentals. 

The rise of the short-term rental of entire homes is taking away much-needed homes for British Columbians. Data from 2023 shows that more than 16,000 entire homes are being used as short-term rentals for the majority of the year in B.C. This is making it more challenging to find affordable long-term places to live. 

Many local governments have taken action to regulate short-term rentals, but enforcement of bylaws is a challenge, and they have asked the Province for more tools and resources. 

The purpose of the Act is to: 

• Return short-term rental units to the long-term housing market  

• Give local governments stronger tools to enforce short-term rental bylaws 

• Establish a new Provincial role in the regulation of short-term rentals 

The Act applies to short-term rentals being offered to the public including: 

• Platforms where people reserve and pay for  accommodation, for example, Airbnb, VRBO, Expedia, and FlipKey  

• Offers on other web listing forums, for example, Facebook Marketplace, Kijiji, and Craigslist 

• Listings in classified ads in newspapers 

The Act will not apply to: 

• Hotels, motels 

• Reserve lands 

• Nisga’a Lands or the Treaty Lands of a Treaty First Nation (unless the Nation chooses to opt into all or part of the legislation through a coordination agreement with the Province) 

• A vehicle, such as an RV 

• A tent or other temporary shelter  

Timeline

The regulations and responsibilities of the Act are expected to come into effect at different times through a phased approach over two years. Highlights include:

• Effective October 26, 2023 (with Royal Assent): Increased fines and business licensing authority for regional districts 

• May 1, 2024: Principal residence requirement (including exempt areas and accommodations), changes to legal non-conforming use protections, and requirement to display valid local government business licence numbers, where business licences are required 

• Summer 2024: Data sharing between the Province and local governments  

• By early 2025: Provincial registry launch and requiring platforms to remove listings without valid provincial registry numbers 

Returning short-term rental units to the long-term rental market

Principal residence requirement 

Effective May 1, 2024, the Province is implementing a provincial principal residence requirement which will limit short-term rentals to:

• The host’s principal residence 

• Plus one secondary suite or accessory dwelling unit on the same property

This requirement does not apply everywhere. Find more information on the provincial principal residence requirement on the principal residence requirement page.

Changes to legal non-conforming use protections

As of May 1, 2024, protections for non-conforming use of property will no longer apply to short term rentals. In some areas, these protections have allowed short-term rental hosts to continue to use their property for short-term rentals even when it was against the bylaws set by the local government. 

• Protections for non-conforming use of property will continue to exist for other land uses

• Information about non-conforming use is available through local governments

Strengthening local government tools to enforce short-term rental bylaws

Display of business licence

Many local governments require a business licence for a host to operate a short-term rental. Effective May 1, 2024, short-term rental hosts must display a valid business licence number on their listing in areas where a business licence is required by the local government.

Platform Accountability

If a listing does not comply with a business licence requirement where required by the local government, the short-term rental platform must remove the listing at the request of the local government.

Data Sharing

To assist local governments with better short-term rental bylaw enforcement, short-term rental platforms will be required to share information about short-term listings on a monthly basis, beginning in May 2024.  

This information is confidential and will not be disclosed to the public.   

Increased fines and tickets

The maximum fine that regional districts can set for prosecutions of bylaw offences under the Offence Act has increased from $2,000 to $50,000. This is consistent with the maximum fines for municipalities under the Community Charter.

The maximum municipal ticketing fine that a local government may set under the Community Charter Bylaw Enforcement Ticket Regulation and Vancouver Charter By-Law Enforcement Ticket Regulation has increased from $1,000 to $3,000 per infraction, per day. This fine can be applied in: 

• Municipalities

• Regional districts

• Islands Trust 

New business licensing authority for regional districts

Regional districts are now able to regulate and licence short-term rentals and other businesses, in similar ways to municipalities. This change comes from amendments to the Local Government Act.

Find more information about regional district business licensing here: Regional district business regulation

Policy guidance for local governments

Local governments can view policy guidance for the Short-Term Rental Accommodations Act here: Short-Term Rentals: Policy Guidance for BC Local Governments (pdf 866 KB)   

Establishing provincial oversight of short-term rentals

Provincial registry

By early 2025, the Province expects to establish a short-term rental registry. This will help ensure that short-term rental hosts and platforms are following the rules.

Hosts will be required to include a provincial registration number on their listing, and platforms will be required to validate registration numbers on host listings against the Province’s registry data.

Provincial compliance and enforcement unit

To ensure the provincial rules are being followed, the Province will establish a provincial compliance and enforcement unit. This unit will:

• Monitor compliance

• Issue compliance orders

• Administer penalties for violations  

Short-term rentals versus tenancies

In general, a booking made on a short-term rental platform is not covered under the Residential Tenancy Act because usually the accommodation is being occupied for vacation or travel purposes. However, there are circumstances in which a tenancy may be established.

Find more information on what types of accommodation are covered by the Residential Tenancy Act at this page: Types of rental housing situations 

If there is uncertainty about the legal requirements related to a specific accommodation arrangement, it is best to speak with a lawyer.

News releases

In addition to the information on this page, please also see the October 16, 2023, Short-Term Rental Accommodations Act news release, backgrounders, and technical briefing presentation.

• News release translations are available in: Arabic (pdf 298 KB), Japanese (pdf 488 KB) Korean (pdf 258 KB), Persian (Farsi) (pdf 275 KB) and Vietnamese (pdf 215 KB)

• News release and backgrounder translations are available in: French (pdf 293 KB), Chinese simplified (pdf 627 KB), Chinese traditional (pdf 740 KB), Hindi (pdf 182 KB), Punjabi (pdf 322 KB) and Tagalog (pdf 246 KB)   

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Disclaimer

The information on this webpage on the Province of British Columbia’s Short-Term Rental Accommodations Act and regulations is provided for the user’s convenience as a basic starting point. It is not a substitute for getting legal advice or other professional advice. If there is a conflict between the information on this webpage and the legislation or regulations, the legislation and regulations prevail. This information may be subject to change, including due to any future government approvals.