The British Columbia government is soon is going to lay out exemptions for the newly announced two per cent speculation tax.
Speaking to reporters in Vancouver on Wednesday, premier John Horgan said his government has heard the concerns about the speculation tax and targeting affordability in the housing market.
“One of the challenges of course in attracting and recruiting not just health care professionals but skilled workers for every sector of our economy is the affordability of the Lower Mainland,” said Horgan. “I am confident (Finance) Minister (Carole) James will have something to say in the days ahead.”
WATCH HERE: Backlash to proposed B.C. speculation tax grows
The B.C. government has been widely criticized for the new tax policy that is seemingly full of potential loop holes. The province will not have formal legislation until the spring, but the first round of tax notices are expected in the fall of 2018.
Principal residences, and those rented out long-term but are owned by British Columbia residents who pay tax here, will be exempt from the tax. But where it becomes confusing is when people own multiple properties. The government is considering exemptions for those who own vacation properties and potentially other secondary homes.
The communities of West Kelowna, Kelowna and the regional district of Nanaimo have asked the province to be exempt from the tax. Those communities are worried about the impact the tax could have on essential tourism dollars.
The tax would be applied based on two per cent of the value of people’s properties.
“We have a housing problem in British Columbia,” said Horgan. “My office has spoken to the mayor of Kelowna as recently as yesterday. Minister James is responsible for the file and I have every confidence in her that she will be able to deal with the challenges that have been raised by some. I have to tell you there are a lot of people who are cheering us on and saying we have to stem the speculation.”
The meteoric rise of Metro Vancouver housing prices has been well documented. From 2014 to 1026, the average house price in Metro Vancouver went up $600,000, while wages did not go up anywhere close to that.
North Saanich resident Dario Stucchi has sent a letter to both James and his MLA Adam Olsen. He lives in North Saanich with his wife and also own a condo in Vancouver that they purchased 14 years ago. They spend 30 per cent of their time in Vancouver to spend time with their daughter and grandson in the city.
“We would not be able to keep our condo should the proposed 2% speculation tax come into effect,” reads the letter to Olsen. “Having a non-refundable income tax credit would still place a heavy financial burden on us as both my wife and I are retired and on fixed income. Our Vancouver condo enables us to enjoy and help our daughter and grandson. Our condo is exempt from the city of Vancouver’s empty home tax as our strata has rental restrictions.
Stucchi is one of many British Columbian’s concerned and confused by the new tax meassure. Former federal cabinet minister, senator and Saturna Island resident Pat Carney has sent a letter to Horgan describing the legislative proposal as so “flawed it cannot be tweaked” and that it must be withdrawn.
“Your proposed tax misses the target of limiting real estate speculation by foreign investors in specific regions of the province and lands a bull’s eye on Canadians, including British Columbians, who support our rural economies,” reads the letter.
Carney owns her primary home on Saturna Island and a secondary residence in Vancouver to ‘access the full range of medical, financial and legal services not available on my island of 320 residents.’
“The proposed tax on secondary residences would force me to make a difficult choice; give up my Saturna home, where my parents are buried, or sell my Vancouver condo, assessed at more than $1 million since strata rules do not permit rentals and I cannot afford the punitive tax proposed,” said Carney.
“Further, about 60 per cent of Saturna home-owners are part time residents, some third and fourth generation. We rely on these families to support our small business community and cultural events and help keep our school open by employing full time residents.”
Carney also raises the question of compliance, questioning how the B.C. government will track how many days a year people are in their homes.
“It may not be your intention to impose a form of police state on Canadians who live or vacation in BC, but the uncertainty surrounding your government’s plans is already creating a sense of panic among some full and part time residents who do not have the funds to pay the increased taxes proposed and wait for possible rebates,” added Carney.
—With files from Emily Lazatin