Land use - residential

If you have a permanent or temporary (seasonal) residential Land Act lease or licence of occupation, it will state that the annual rent for your tenure is determined by the B.C. government. This does not mean that the B.C. government arbitrarily determines your rent each year. Instead, the B.C. government has a set of pricing policies  which determine how rent for all uses of Crown land are calculated, so that everyone is treated fairly and equitably.

Rents are calculated as a percentage of the fair market value (FMV) of the land. More valuable properties (larger and more favourably located parcels of land) are worth more, and therefore rents are higher. The B.C. government uses the assessed value from BC Assessment Authority (BCAA) to determine land value. Assessed values are used because:

• BCAA has expertise in efficiently determining FMV of a wide variety of properties
• The values are updated annually
• There is a well-established appeal process when there are disagreements with assessed values

Occasionally, the BCA value is inappropriate, and in those cases a land appraisal may be commissioned to determine the FMV of the land as per the Appraisal Procedure.

Residential rents are typically established through a combination of financial principles, market conditions and regulatory guidelines to ensure fairness for both the Crown and tenure holders. Considerations include:

• Historical data: Market rental value data used by the B.C. government and other government leasing authorities indicates that current yield rates for residential land are in the range of 2.5% to 4.0%
• Fair Market Value (FMV): FMV is a crucial concept in setting residential rents, representing the price at which a property would rent in an open and competitive market. This alignment with current market conditions ensures that rents reflect the supply and demand dynamics of the housing market
• Generally Accepted Accounting Principles (GAAP): GAAP principles guide financial reporting and accounting practices for rental properties, emphasizing transparency, consistency, and fairness. The B.C. government considers market trends to ensure rents are fair to tenure holders and sufficient to cover costs while generating a reasonable rate of return

Using these considerations, 3% of current land values was determined by the B.C. government to constitute a fair return for the use of Crown land for Residential purposes.

Land Act tenures are not subject to the Residential Tenancy Act or the Manufactured Homes Park Tenancy Act, as per Section 1.2 of Residential Tenancy Regulation. However, as noted above, annual rental increase limits will be applied to those tenures issued for permanent occupancy.

Both seasonal and permanent tenures are charged 3% of annual BCAA assessed land value. The difference between the two is that for permanent tenures, the annual increase is capped to match the Residential Tenancy Act (RTA) but no such cap is used for seasonal tenures. This change to residential pricing results in rental relief being provided to those tenure holders who use their tenures as their primary residence. These tenure holders now have the certainty of rents, similar to those permanent tenants who fall under the RTA. It is important to note that if these tenures are assigned to someone else at any point, they will be reassessed at current market value.

Seasonal residential tenure holders have not been provided with this relief, as by definition, these tenures are not for primary occupancy but rather are used for recreational purposes as secondary residences.

Land Act residential tenure rental amounts were frozen from May 1st, 2022 until April 30th, 2024. This freeze provided temporary relief to residential tenure holders while the B.C. government analyzed market rents and determined an appropriate pricing rate. Beginning May 1st, 2024, the rental freeze was lifted and seasonal residential rent resumed at 3% of annual BCA land value. As noted above seasonal residential tenures have not been provided with a cap on annual rental increases.

During the two years of the rental freeze, BC Assessment land values increased in some areas which may have resulted in a large increase once the rent freeze was lifted. Tenure holders did not see these increases in their past year’s invoices due to the rental freeze. Tenure holders overall saw savings in the previous two years of rent as they were not charged higher rent in line with land value increases for those years.

If tenure holders disagree with the Fair Market Value (FMV) of the land as established by BC Assessment Authority (BCAA), they must follow the procedures and timelines as set out by legislation to appeal the assessed valuation.

If the assessed value is used to determine your annual rent, and you think there may be a mistake with the assessed value following completion of the BCAA review and appeal process, contact your regional land officer in writing explaining the nature of the issue.

Disagreements in the determination of rent amounts are resolved by following the Disposition Price Resolution process. As noted in the procedure, you may be required to hire an independent qualified appraiser to determine a fair market value for your tenure.

Property taxes are calculated and paid separately from rents. Property taxes are used to pay for local services, such as fire protection, local road maintenance, schools, policing, garbage collection and management, etc. These services are separate from your rent, which is paid to the B.C. government in exchange for the right to use and occupy Crown land.

The B.C. government, through the Surveyor of Taxes Office, collects property taxes for tenures located outside of municipal boundaries, and the tax revenue is then distributed to regional districts, improvement districts, and other local service providers.

Your Land Act tenure agreement will provide details on your responsibilities as a tenure holder; it is important that you review and understand the provisions in your specific agreement. Generally, you are not to despoil the land by depositing contaminants, you are to only use the land for your personal residential use, rents and property taxes are to be paid annually, and all applicable local bylaws and provincial and federal laws are to be followed as examples of the tenure clauses.

You cannot use the land in a manner inconsistent with the purpose of the tenure. For example:

• If you have a recreational residential tenure, you may only use the land seasonally – it is not intended for use as a primary residence
• Recreational residential tenures are intended for the use of yourself and your family. Short Term Rentals (for example,. Airbnb, VRBO) are not permitted

You cannot assign (transfer) or sub-tenant your tenure to another person without permission of the B.C. government (as per your tenure agreement).

Review your tenure agreement for more information on what you can and cannot do on your tenure. If you have questions, contact FrontCounter BC to speak to a regional land officer. For contact information, visit Natural Resource Online Services.

Not all residential or recreational tenures are available for purchase. This may be because:

• There are deficiencies in the parcel that make it unable to be registered under the Land Title Act
• The B.C. government has determined it needs to retain ownership of the land for other future objectives
• There may be significant natural hazards that have either emerged, or that were not recognized as hazards at the time the tenure was issued

If the land is made available for purchase, it will be at the fair market value of the land (not including improvements) at the time the offer for purchase is accepted, and no credit for rents previously paid or improvements will be applied against the sale price, unless your tenure agreement specifically makes provision for such a credit.

Contact your regional land officer if you are interested in purchase and they will be able to determine if your parcel may be available for sale. For contact information, visit Natural Resource Online Services.

If you are currently using or wish to use your seasonal residential tenure as your permanent place of residence you may be eligible to convert your tenure. Note that in order to convert to permanent residential use the tenure holder will be required to show proof on demand of permanent occupancy, typically in the form of a Home Owner Grant.

Contact your regional land officer if you are interested in tenure conversion and they will be able to advise you on eligibility and next steps. For contact information, visit Natural Resource Online Services.