The Additional School Tax (AST) was introduced by the Province in 2019 as an annual surcharge on high-valued residential properties, adding to the residential property tax rate. The AST applies to Class 1 (Residential) properties defined as “Dwelling Property,” and is set at the rates of: 

• 0.2% on the portion of assessed value between $3 million and $4 million, and 
• 0.4% on the portion above $4 million. 

Dwelling Properties captured by the AST include residential strata units, non-stratified developments with three or fewer units, and land or airspace deemed by BC Assessment to have “no present use” (outside of the ALR). For vacant development land, the AST generally applies until excavation begins for the purposes of construction, although limited exemptions apply (e.g., preloading or sheet piling). 

As reported previously, a key test case was brought forward by the Musqueam Indian Band for its Lelum development at UBC. The Property Assessment Appeal Board (PAAB) had originally ruled in favour of the taxpayer, determining that land with “no present use” for classification purposes could be treated differently for the application of AST – meaning AST did not need to apply to development land not yet excavated. BC Assessment and the Province appealed that decision to the BC Supreme Court, which ruled in their favour. The Musqueam were granted leave to appeal to the BC Court of Appeal; however, the case was ultimately discontinued after a Remission Order was granted to remove AST from the property. 

Since that time, the development industry has worked collaboratively with BC Assessment and PAAB to address the broader set of AST appeals that remain outstanding. The appeals have been grouped into “buckets” based on common evidentiary features and site characteristics. 

Resolution has been achieved in some buckets, including: 

• Lands that are close to the excavation stage but not quite there, where AST had previously been applied; and 
• Multi-building development sites where BC Assessment initially applied AST on the basis that each building had fewer than four units. BC Assessment has now accepted that AST should not apply where the property, as a whole, comprises four or more units. 

A two-week PAAB hearing has been scheduled for July 2025 to address unresolved “bucketed” cases, including: 

• Land under active development that has not yet reached, or is not considered close to, excavation; 
• Land that is currently vacant but forms part of a phased development, where other phases are already under construction; 
• Multi-family development sites that currently include a tenanted single-family home; and 
• Air space parcels located over commercial buildings. 

The UDI Tax Committee will continue to monitor developments closely and will provide further updates following the outcome of the hearing in July.