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Municipal leaders put pressure on provincial government to change speculation tax

Mayors meeting at the Union of BC Municipalities convention are calling for drastic changes to the proposed speculation tax on real estate. Richard Zussman reports.

Municipal leaders from across British Columbia voted on Tuesday to get the Union of B.C. Municipalities (UBCM) to push the provincial government to give local government the power to put in place an empty home tax.

The motion was put forward by Oak Bay mayor Nils Jensen, who argued that municipalities should be given the power to decide whether they want such a tax, rather than have a speculation tax imposed on municipalities based on the province’s choosing.

“The spec tax in it’s current form will bring down the government,” said Oak Bay mayor Nils Jensen. “We don’t want that. We don’t intend that. We are constructive. We are trying to chart a middle path.”

READ MORE: B.C. government exempting vacation homes from speculation tax

The speculation tax has not been formally introduced into legislation and is expected to be tabled by the provincial government in October.

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The way the tax is set to work currently is that those living outside of Canada, and not paying taxes here, will pay two per cent on the assessed value of their home starting in 2019 if the property remains empty. Canadians that do not live in British Columbia will pay a tax of one per cent starting next year. British Columbians who own multiple homes, and keep them empty, will pay 0.5 per cent tax.

Green Party leader Andrew Weaver says the speculation tax is more like a vacancy tax than a true speculation tax and he would not support legislation, or a subset of the legislation, without the support of those local communities. Weaver says he can’t support the government’s legislation and is expected to propose amendments to the rules if they aren’t changed before the legislation is tabled.

“I would propose that we introduce legislation to enable local governments to serve their communities best,” said Weaver.

“Why is it that government is deciding the best way to do it is introduce the sledgehammer approach? There are many things we could do to go after speculation. We could go after bare trusts.”

READ MORE: Government promises clarity of speculation tax in ‘days ahead’

The Green Party currently holds the balance of power in the legislature and if the party votes with all the B.C. Liberals on a confidence motion they could bring down the government. The speculation tax legislation would not be a confidence vote and Weaver is still expected to vote for it after proposing amendments.

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The speculation tax, as currently designed, only applies to certain communities in B.C. The tax will apply to Metro Vancouver, the Capital Regional District (excluding the Gulf Islands and Juan de Fuca), Kelowna, West Kelowna, Nanaimo-Lantzville, Abbotsford, Chilliwack and Mission. Nanaimo, Kelowna and West Kelowna have asked the provincial government to be exempt from the tax.

WATCH HERE: B.C. Premier John Horgan on the future of the speculation tax

B.C. Premier John Horgan on the future of the speculation tax
B.C. Premier John Horgan on the future of the speculation tax

“The City of Kelowna’s concerns with the tax is that it won’t actually address speculation and there will be other potential unintended consequences,” said Kelowna mayor Colin Basran.

“I am also concerned that it’s not equitable because it’s not province-wide — true speculators can simply purchase in neighbouring communities without contributing for the tax.”

WATCH HERE: Two Okanagan mayors meet face-to-face with B.C. premier John Horgan to discuss their concerns about the controversial speculation tax

Two Okanagan mayors meet face-to-face with B.C. premier John Horgan to discuss their concerns about the controversial speculation tax
Two Okanagan mayors meet face-to-face with B.C. premier John Horgan to discuss their concerns about the controversial speculation tax

Finance Minister Carole James says she has been meeting with mayors this week and is well aware of the concerns. The province has ruled out applying the tax to all jurisdictions because they picked communities that have low rental vacancies.

“There is reason why we are bringing in this speculation tax. There is a housing crisis in British Columbia. We need to address that crisis,” said James.

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“It is a complex tax it is meant to ensure we can provide affordable housing for people.”