B.C. government hints at changes to speculation tax so it doesn’t impact locals with vacation homesSynergy Mortgage
B.C. government hints at changes to speculation tax so it doesn’t impact locals with vacation homes. British Columbians who own vacation homes in certain areas, including Gulf Islands, currently in limbo.
BC. Finance Minister Carole James gave hints on Wednesday the government would be generous with exemptions to local residents that have vacation homes that could be impacted by the new speculation tax.
“We’re working on those details now, including all of the issues people have been raising,” said James, who said some details of exemptions to the tax — which will be assessed at two per cent of a vacant property’s value beginning in 2019 — would be released this spring, months earlier than they had originally communicated.
“We’re aiming to make sure we get speculators out of the market,” she said.
When it was pointed out that the proposed tax, as outlined, would financially penalize some locals with vacation homes held for decades, James said “that’s not our aim. It’s to make sure we get speculators out of the market.”
Tax credit for affected locals
When James announced the tax last month, the government said it would apply to British Columbians and non-British Columbians alike who owned residential property that either wasn’t rented out or wasn’t their principal residence, in the following areas:
* Metro Vancouver — including Bowen Island — and the Fraser Valley Regional District.
* Capital Regional District (includng the lower Gulf Islands).
* Nanaimo Regional District (including Parksville, Qualicum Beach and Gabriola Island).
* Municipalities of Kelowna and West Kelowna.
The government has said a non-refundable income tax credit will help offset the tax for B.C. residents.
But how much that credit would be is a big question in communities where large parts of the population are part-time residents who could face a new annual tax in the tens of thousands.
“When we proposed a speculation tax, we were not thinking of it as hitting a retired couple who have a longtime vacation home on a Gulf Island. That was not the intention of this tax, and that is what we’re starting to hear,” said Green Party MLA Adam Olsen, who represents Saanich North and the Islands.
He acknowledges finding a solution is tricky, because every community has its own challenges.
“If you take a look at Salt Spring, it has a larger population, and there’s a massive housing challenge there. Nurses and service workers and even doctors can’t find a place to live. Whereas Mayne Island and Pender, there’s smaller populations that really explode in the summer.”
Details to come
B.C. Liberal MLA Michelle Stilwell, who represents Parksville-Qualicum, is also hoping details come quickly.
“People who live there part-time for half the year, they’re part of the community. They volunteer in the community. They take part in events. They spend money,” she said of her community, which has the oldest median age in the province.
“For them to have this increased tax … for seniors on fixed incomes, they can’t afford it, and now they’re having to talk about selling their family home or put away their retirement dream and put it on the backburner. How is that fair?”
At the same time, Stilwell is concerned that if the government increases the number of exemptions, they won’t be able to meet their budgeted goal of $200 million annually from the speculation tax.
“How is this going to end up in their bottom line? That revenue they were expecting to get from this speculation tax … is there going ot be a different tax coming to taxpayers in another way?”
For her part, James is urging the public to be patient, saying the reason they announced the tax months in advance is so they can fine tune the details.
“We’re taking the time to make sure we do the implementation well,” said James.
“You’ll see the response and you’ll see the specifics.”