Closure Allowances for Major Closure Allowances for Major Industrial and Electrical Properties

Closure allowances for Major Industrial and Electrical properties

The improvements of major industrial (MIP) plants and the improvements of electrical power generating (EPG) facilities may be subject to closure allowance under Section 9 of the Depreciation of Industrial and Electrical Power Generating Facility Improvements Regulation – B.C. Reg. 53/2016.

What is closure allowance?

Closure allowance is an assessment relief for individual industrial and EPG improvements or entire plants and facilities when they have been closed or shut down. Closure allowance reduces the improvement value to 10% of the cost. In other words, depreciation is increased to 90%.

Criteria to qualify

a) The plant/facility or individual improvement must be permanently closed on or before October 31 of any year to qualify for closure allowance in the succeeding year and the owner or a senior executive officer of the corporation that owns the plant confirms in writing that the closure of the improvement or plant is permanent. The letter must specify the permanent closure date.

b) The plant/facility or improvement must be closed for a minimum of 3 consecutive years immediately preceding October 31 of any year to qualify for closure allowance in the succeeding year and the owner or a senior executive officer of the corporation that owns the plant confirms in writing that the improvement or plant is closed and the duration of that closure. The letter must specify the commencement date and closure duration.

Written confirmation must be made to the assessor of the assessment area in which the plant/facility is located.