B.C. speculation tax is still being tinkered with as criticism mounts
The B.C. government is set to make changes to the proposed speculation tax on homes amid concerns from British Columbians.
Finance Minister Carole James said the province will adjust the tax targeting those who don’t live in the homes they own after hearing public feedback.
Coverage of taxes targeting housing on Globalnews.ca:
“This is a new tax, a bold tax,” James said.
“We wanted to make sure that we took the time when we brought in budget in February. Details to come.
“We are aiming to make sure we get speculators out. We don’t want people to treat our housing market like the stock market.”
One of the changes the province is considering is ensuring British Columbians that pay income tax in the province do not pay the speculators tax on vacation or secondary properties in B.C.
The new tax, which is expected to be two per cent on the value of a home, will initially be applied to homes in Metro Vancouver, the Fraser Valley, the Capital Regional District, Nanaimo and Kelowna.
The province will not send out tax notices until late in the fall, which gives the government time to finalize the legislation.
“What they want to do is slowly chip away at the equity in people’s homes,” said BC Liberal leader Andrew Wilkinson. “What they are doing is they are saying they want to tax people’s assets and they are now trying to find a way to make that workable.”
WATCH HERE: B.C. municipalities will also have to pay the new payroll tax
No changes coming to payroll tax
But where the government is not willing to budge is on the controversial payroll tax. The B.C. Liberals have raised more than a dozen cases in which school boards, municipalities and small businesses will pay more due to the tax.
The opposition has also raised the issue of government being required to offset the increase in cost to universities, school boards and health authorities. In those cases, the provinces will have to increase the budgets in order to pay for the increased cost tied to the payroll tax.
“It makes no sense to tax them on one hand and then give them the money back on the other hand,” said Wilkinson.
The MSP will be gone on Jan. 1, 2020, with the payroll tax being implemented on Jan. 1, 2019.
Businesses with payrolls of more than $1.5 million will pay a tax rate of 1.95 per cent on their total payrolls.
Any businesses with payrolls between $500,000 and $1.5 million will pay a reduced rate, and businesses with payrolls below $500,000 will not pay the tax.
WATCH HERE: Small businesses blast new MSP premiums
Municipalities hard hit
It’s not just the provincial government that will have to pay more.
Municipalities are on the hook for millions more per year.
The City of Vancouver currently pays $2.5 million in MSP for its employees. Once the tax comes into effect, it will pay $13.1 million, an increase of $10.6 million that will likely be passed on to residents through an increase in property taxes.
In Richmond, MSP currently costs the city $750,000, while the payroll tax will cost $2.5 million for a total increase of $1.75 million.
Businesses concerned about soaring costs
Businesses are also being affected by the new payroll tax.
Especially hard hit will be the companies that do not currently pay MSP to their employees. LIFESUPPORT Patient Transport in Parksville is looking at the possibility of moving its work out of British Columbia because the new tax could cost an additional $70,000 per year.
Parksville-Qualicum MLA Michelle Stilwell said the BC NDP isn’t ridding the province of MSP so much as “replacing it with a new health care payroll tax.
“The government should not be so dismissive of small businesses, they have true concerns,” she said.
Here is a list of other businesses, school districts, municipalities, health authorities and post-secondary institutions that have been raised by the opposition, and the costs they could face when the new payroll tax comes into effect:
- Flying Fresh Air Freight (Richmond) – $40,000
- Gabi & Jules (Port Moody) – $6,000
- Inland Plumbing and Heating (Kelowna) – $185,000
- Jansen Family Farm (Langley) – $100,000
- KF Aerospace (Kelowna) – over $1.0 million
- Ocean Trailer (Delta) – $125,000
- Parksville Chrysler (Parksville) – $60,000
- Pioneer Chrysler Jeep (Mission) – $76,000
- Restaurant Owner, Justin Atterbury (Columbia Valley) – $22,000
- Van Belle Nursery (Abbotsford) – $100,000
- Chilliwack School District (Chilliwack) – $1.6 million
- Kamloops/Thompson School District (Kamloops) – $250,000
- Kwantlen Polytechnic (Surrey) – $2.0 million
- Okanagan College – $889,000
- Simon Fraser University (Burnaby) – $7.0 million
- Vernon School District (Vernon) – $450,000
- City of Coquitlam – $600,000
- City of Kamloops – $700,000
- City of Langley – $236,000
- City of Maple Ridge – $700,000
- City of Richmond – $2.5 million
- City of Surrey – $3.35 million
- City of Vancouver – $13.1 million
- Interior Health Authority – $3.3 million
- Thompson Community Association (Richmond) – $12,000
© 2018 Global News, a division of Corus Entertainment Inc.