Seeking clarity
I have heard from many constituents, particularly on the Gulf Islands, on their concerns about how the speculation tax might impact them. The legislation to implement this tax will not come until the Fall. While the government has stated there will be exemptions, they have yet to provide full clarity on what they will look like. We are seeking clarity and continuing to press the government to articulate its intended outcomes of its housing policies.
Many communities across BC are experiencing a housing crisis. We have heard from British Columbians from Vancouver to Nelson, that the housing crisis is hurting their local economies. It is driving out young people, limiting the ability of businesses to attract workers and driving up costs for businesses.
Need action on housing but must protect British Columbians
Government needs to take action on the housing crisis so that people can afford to live where they work and so that we can have a sustainable, diverse, thriving economy. The goal of the BC Greensā housing policies is to help British Columbians struggling amidst the housing crisis, especially in cities like Vancouver and Victoria.
The problem is not British Columbians who are contributing to communities. Thatās why our proposed speculation tax was specifically not targeted at British Columbians. And thatās why we proposed other policies, like a ban on foreign capital and a flipping tax, to specifically target speculative activity. My colleagues and I are in ongoing discussions with government. We are working hard to ensure that government limits any unintended consequences that could end up hurting British Columbians.
Hello Adam,
I’m writing to you as a concerned home owner who has worked hard and sacrificed a lot over the last 17 years to build a 2nd home on South Pender Island. I’m shocked the NDP would even consider implementing a tax like this!
We’re hoping to one day retire on the island, but this tax would all but destroy any hope. Just a thought, but why not go after commercial buildings that are bought and sold through holding companies and don’t pay property transfer taxes like everyone else?
Maybe even look at SLOWLY phasing out the home owner grant
Kind regards,
Mike McLean
Hello Mike,
Thank you for your message. I want to state clearly. You are not the intended target of a speculation tax but unfortunately this proposed tax has captured a whole bunch of people that are not part of the problem, chiefly a massive inflow of offshore capital unsustainably inflating our housing market. We are working to get this situation resolved. Please stay tuned for more information on my website and from my office.
All the best,
Adam
We have lived in Saanich for over 40 years, and bought some property on Saturna 27 years ago. We built a holiday cottage ourselves there when I retired 12 years ago.
We go over there about once a month, and our family and friends use the cottage as well.
We strongly oppose any attempt to describe us as āspeculatorsā and charge us additional taxes
Hello Alastair and Peggy,
I agree in the strongest terms possible and we are working to have this situation resolved. Thank you for reaching and stay tuned for more information on my site and from my office.
All the best,
Adam
This tax is potentially fantastic news for most British Columbians. Any home that remains empty is taking away that home from a potential full time resident in the community and thereby contributing to inflated housing prices. If foreign speculators leave and BC speculators pick up the supply, this will not help. Foreign buyers will find many innovative ways in incorporate BC entities to buy up properties, or funnel through BC residents etc so all of these loop holes need to be closed.
It’s far more complicated than that Michael. Not any home sitting empty will fill the void.
The tax on the more expensive homes, say over $2 million are not a high commodity that is easily rented. The pool is small.
The current government does not have any solid numbers on foreign Buyers either. This is called a speculation budget with wealth taxes.
The direct targeting of reducing home prices will destroy many middle class first time buyers who have taken the risk to buy a home. Coupled with increasing mortgage rates and new Federal mortgage rules this is ludicrous.
There are hundreds more items that have to be addressed. The housing portion of the budget should not have been released until proper consultation with the industry had been done.
My wife and I have lived and owned on Salt Spring Island since 1999. I am not a realtor or speculator or flipper. The government’s new taxes and proposed speculation tax are a gigantic mistake here and will cause harm to our local community.
IF the intention of the foreign buyers’ 20% purchase tax and 2% added property taxes (for vacant property owned by those who do not pay BC taxes) is to stop speculation, please note that speculative activity on Salt Spring Island is non-existent. There is NOTHING in the price history of property on Salt Spring or the other Gulf Islands to indicate speculative activity. Properties that sit empty here are either used seasonally as vacation homes, OR they are owned by people intending to move to Salt Spring in retirement. I have seen both cases first hand, and we ourselves owned our property for five years before moving here in 1999. In any case, the owners of these properties contribute to our local economy. Penalizing these people is not justifiable.
IF the intention is to stop massive price escalation, one need look no further than the record of property appreciation here to realize price gains have indeed been very modest relative to the lower mainland and Victoria. Again, there is no reason to introduce draconian measures that will drive people away from our locale, and hurt current resident property owners by driving down prices now that they have finally recovered from the recession of 2008.
IF the intention is to bring free up housing stock by “incentivizing” non-resident owners to sell, one must indeed ask who the next buyers might be. IF these potential new buyers are assumed to be those who cannot afford a home currently, one must ask HOW MUCH will prices have to drop before this minority can be accommodated. IF the intent of these new policies and taxes is to drive prices down, one must ask why the vast majority of property owners must be impoverished to accommodate minority interests.
Sure, it is true that affordable housing is an issue on Salt Spring Island as it is in many other coastal communities. However, the new taxes and the proposed “speculation tax” to be tabled in the fall are very inappropriate on Salt Spring Island and other slow growing locales (ie. communities other than the lower mainland and perhaps Victoria).
IF affordable housing is a priority, the government should be proactive in creating incentives for developers to build and provide more moderately priced homes, both for ownership and for rental.
As an aside it is worth noting, however, that many Gulf Islands (including Salt Spring) are members of the Island Trust, which is in policy and practice quite resistant to facilitating densification, especially anything that would require upzoning. In addition, we have a very strong anti-development community on this island. Also, on Salt Spring as with most other Trust area islands, we are unincorporated. Thus, our governance is fragmentary and this creates even more impediment to getting any creative solutions in place. Witness the North Salt Spring Water District, with its years long moratorium on any new water connections!! These present significant structural impediments to increasing the supply of affordable housing, which may take another generation or three to fully address. By contrast, the government’s tax measures both actual and potential do nothing to create affordable housing, and may only hurt existing property owners by damaging property values (yet not enough to make things “affordable”, whatever that now means!)
IN CONCLUSION, let me say our local economy is far from robust as things stand. Many businesses here struggle to survive, but the track record for overall longevity for many is pathetic. Many business here in seasonal – Salt Spring depends greatly on tourism, and tourism in turn not only feeds the local economy but also generates activity in our real estate market. Those who buy and don’t live here currently generally have a long view of both their investment and their future participation in our community. DO NOT penalize them and do not apply punitive tax measures that are inappropriate, that will drive people away, that will deprive our community of a valuable source of economic well being, and that will down property values, impoverishing those that remain.
Hello John,
Thank you so much for your thoughtful comments. My colleague Andrew Weaver made a very strong response in the house today with respect to the roll-out of these taxes. It is true we have been pushing for strong policy measures to deal with speculation, flipping and the impact of offshore capital inflating the housing market.
We proposed several tools including a speculators tax. We are not alone, several prominent economists also have proposed a tax on speculation. But, this is not a speculation tax. It is too broadly applied and does not target the problem that needs addressing and negatively too many people we never intended to impact. I have been asking government in Question Period what their intended outcomes are on their housing policy, and unfortunately I never received an answer. Without knowing what the outcomes are, it is impossible for British Columbians to evaluate the success or understand who government is targeting.
I will continue to work towards a fair resolution to this, to ensure their measures are actually fixing the problem. And, I will work to encourage government to be clearer on what they are trying to achieve.
All the best,
Adam
The housing crisis won’t be solved by any tax that forces my non resident neighbour (and any other Salt Spring Island recreation property owner) to sell his property. It won’t free up space for someone who can’t get into the market. All it will do is make it cheaper for an existing property owner to trade up for a house with a nicer view.
Thank you for your comment! Point taken š
Adam
Adam,
I’ve owned a vacation property on Galiano for 6 years. My property is currently assessed at pretty close to exactly the price I paid for it 6 years ago. There has been no property “speculation” on the gulf island and the flat prices over the last 10 years or so is the proof. Gulf island property prices are more influenced by the services or lack there of offered on-island and the general higher cost of living such as ferry rates. The gulf islands are not an alternative housing option for lower mainland residents. If this speculation tax ends up including the gulf islands, the only result will be dramatic reduction in the value of many properties as all the vacation properties are dumped on the market. Why would this new tax not include Whistler where properties have risen dramatically in value and the level of speculation is dramatically higher?
Dear Adam,
Thank you for your reply to my missive. I appreciate your understanding that the proposed speculation tax hits many who don’t deserve it. I hope you also understand that the 20% foreign buyers tax is also inappropriate in slow growing communities. This tax will affect Americans and others who buy second homes here, but as I’ve mentioned there is no evidence of speculation.
What I fear and perhaps prejudge of this government is the sort of political grandstanding that panders to their base, to show that “something is being done to fight for the little guy”, even if it’s a poorly thought out and obviously harmful initiative for smaller communities. The 20% buyers tax and increased property transfer tax applied across our region is hardly targeted at all, and the additional speculation tax would be just as ridiculous, and onerous, as the ones already brought to bear.
Please stand strongly for properly targeted taxes. Slow growing communities that show no signs of price excess should clearly be exempt.
My husband and I have owned our Saltspring property for over 20 years with plans of retiring there one day. Over that period of time we have poured our dreams, our hard work and our finances into building a modest home on our Saltspring property. We regularily frequent Saltspring on weekends, holidays and the summer and during those times we have supported the island’s local economy with every purchase we make and we have happily paid full property taxes to support the community in which we hope to live one day. The government’s proposed speculation tax will have devastating financial consequences for us as moving to Saltspring at this particular point in time is not financially feasible. My husband and I are both still working, retirement is still 4 or 5 years away and we have a teenager in high school. We are not speculators and it irks us no end that we are being forced by the current government into having to consider renting out our future retirement/vacation property in order to circumvent this tax. We feel disheartened, frustrated and scared that we may loose this property that we have worked so hard for.
Adam, I would love to know what the plan is to protect the first time buyers and younger purchasers from having their homes forclosed on when the government policy basically states you want to lower home costs. This will erode equity and change the way these young families can finance their homes. Is this a sacrifice that these young families will have to pay for because they took the risk to buy a home? Plan is utterly flawed and prejudicial to people who have invested in a home to date and doesn’t look at equity retirees from across the country have built over their careers.
I am outraged with the proposed speculation tax proposed for British Columbia.
This tax will ruin the B.C. economy. How can you tax Kelowna but not Vernon or any other small town? As well what about Whistler?
This proposed tax is punitive and will affect ordinary British Columbians and other Canadians who want to retire on the Gulf Islands or Victoria.
If the intent is to provide housing for lower income people, they won’t need that housing because they won’t have a job in this Province.
I hope that the government will re-consider and eliminate this proposed tax.
Concerned Victoria resident.
Hi Adam,
These articles are great. Written for a US audience but absolutely applicable here.
https://www.strongtowns.org/journal/2017/12/11/immutable-laws-of-affordable-housing
https://www.strongtowns.org/journal/2018/3/2/nimbys-are-right-development-is-terrible
Eric
We are writing to you in hope that your Government will rethink your proposed Speculation Tax. Before I outline the serious flaws and gross unfairness associated with this proposed tax perhaps you might consider that fact that we B.C. property owners are not a burden on the residents of this Province and certainly not your Government. In fact the opposite is true. We along, with our fellow Canadians and non resident Canadians contribute mightily to your provincial economy and to the local economy where we own our homes.
My Wife and I have owned our Salt Spring B.C. property for 15 years. We built rebuilt our home in B.C. using B.C. contractors, materials manufactured in B.C. and B.C. suppliers. This home was recently renovated again using B.C. contractors and suppliers. The B.C. economy and your Government benefited significantly from these transactions. Letās remember, that the Island economy benefits from our property taxation, and our participation in supporting businesses and services. This would apply equally to every other targeted municipality with non-resident home owners.
Canada offers numerous beautiful places to live.
We do share our home with family and friends who come to enjoy the area providing substantial tourism revenue and as a result B.C. benefits from this spending because we are here.
There are so many things wrong with this proposed tax itās difficult to know where to start. I will try to categorize the most obvious of these:
Fairness
Where is the fairness in the application of a tax that imposes a burden of 4 or 5 times the existing property tax burden which is already high by most other jurisdictions in Canada. Is it right that your Government imposes a tax that is so onerous many families simply cannot afford to pay it and therefore they will have no choice but to sell? Remember that many of these families have had their properties passed down over generations.
How could it be considered fair that your Government could apply this tax unilaterally to a few areas but not all areas where the supposed impact you are trying to subvert is no different.
Ethics and the misuse of power
The Governments of B.C. have openly invited and even enticed Albertans, Canadians and I expect foreigners to come to āSuper Natural BCā, for years. Your B.C. economy depends on tourism. Do you not think that this tax will have a negative impact on tourism? Do you not see as do we and others, this latest tax posture is a ādouble crossā?
Canadians
In many respects what your Government proposes is protectionist. History has proven this strategy does more harm than good in the long run. How is that the B.C. government can discriminate against fellow Canadians – let alone think this is an appropriate course of action. You are creating divisions amongst Canadians. Is it your intention to emulate the behavior of our Southern neighbor? If not is sure seems that way.
Unknown consequences
This tax burden could have a devastating impact on home values and the real estate market in general. It is reasonable to expect an immediate drop in home prices with the same reduction in assessed values and therefore Government tax revenue. Those reduced home values will have an effect on everyone in the impacted areas including B.C. residents.
What sense is there in penalizing all of those who own properties; residents, and non-residents alike, so that your Government can supposedly make getting into the housing market more affordable for those who currently donāt own homes. How will increasing animosity towards government policies and agendas help generate the will and the resources needed to help those who need financial assistance to get these homes and proposed. How do you think the development community will react when their business plans are no longer viable, when there are no buyers for their product? When industry suffers social programs suffer in tandem.
We have the means to become B.C. residents which would moderately change our lifestyles as we already spend most of our year there. We speak here for the many others who are not in our circumstances, as we are retired and free to live anywhere we choose in Canada, as Canadian citizens. This tax is an outrage. All Canadians must defend against this abuse of political power. Power, which your government has been given the honor to wield responsibly, and with accountability.
These are just a few of the concerns we have about this proposed tax. This speculation tax, if enacted, could only be construed as a gross abuse by your Government. I hope in all sincerity that this tax never sees the light of day. If it does you can expect an enormous backlash from not only those your Government evidently seeks to penalize but the B.C. residents and businesses who will suffer as a result.
We purchased a small run down cabin on SaltSpring 5 years ago with the intention of retiring to the Island. We have contributed at least $75,000 to the local economy through local contractors and supplies. We are not speculators, nor are many who this tax affects. It should be noted that this cabin was on the market 8 months at least. Even if the tax is implemented, and we lose our labour of love, this home is not affordable. While there are many on the Salt Pring who would love to see folks like us go, the Island economy depends on both tourism and seasonal housing. To paint all with one brush and to penalize our contribution is offensive. We have not rented our cabin as an Air B and B. We have resisted bringing supplies from outside the province. There appears to be no evidence that this tax will help with affordable housing or availability of housing.
We truly hope that you rethink your position of support for the recently announced NDP ātax grabā regarding secondary residences. We believe it was a hasty, ill thought out attempt at trying to address an issue that really requires some more careful considerations.
Most British Columbians are not the ones spurring the speculative market. We are all well aware of the foreign pressures driving the market, specifically in Vancouver and Toronto. This has in turn forced some pressures on other markets such as Victoria as long time Vancouverites with older homes take advantage of a high selling price to purchase homes on the island at a cheaper price for retirement or lifestyle.
Dana and I have always lived and worked in British Columbia, paying income and property taxes. We have volunteered in our communities and feel we have contributed to our society here.
This tax initiative will not solve the rental or affordable housing issues.
Here is what it will do:
Island economies such as the Penders will suffer as many businesses rely on āsecond homeā owners. The island economies are fragile.
Long time āsecond homeā owners on the Penders who have created a special place for family to gather and also plan for their retirement living will be unfairly penalized. They did not buy to speculate and sell.
Island communities also rely heavily on volunteerism to enable many events and initiatives.
āSecond Homeā owners volunteer and also contribute significant sums of money in support of community initiatives.
Let me give you a personal account:
40 years ago my wife and I managed to āmortgage our soulsā and purchase the property that we now have lived on permanently for the past almost 18 years.
If we were forced to pay the proposed tax, we would not have been able to keep this property over the years we worked to be here.
Since we have purchased the property we have:
Paid property taxes every year
Supported BC ferries as we travelled regularly
Contributed to the local economy i.e. builders, restaurants, grocery stores etc. etc.
We have also contributed to our community by volunteering:
Creating and conducting a childrensā choir for 9 years
Directing (Bruce) and singing (both) with the Pender Choral Society choir
Serving as a volunteer firefighter/first responder (Dana)
Serving as an Islands Trust Trustee (Bruce) for two terms
Volunteering with the Pender Parks and Recreation committee (Bruce)
Volunteering as the MC for the Pender Islands Fall Fair (Bruce)
Chairing a Charity Pro am committee at our local golf course that raised thousands of dollars for our Medical Centre and for scholarships for Pender students
Providing coaching lessons for children (free) at our golf course. (Dana)
Being the official trumpeter (for free) for the Legion Remembrance Day and burial services.
And many other community organizations and initiatives.
If we had to sell years ago, none of this volunteerism would have happened.
We did not buy our property to speculate. We scrimped and saved so that we could one day come to live in and contribute to this special community.
Looking back, if we really wanted to make more money, we could have stayed in the busy lower mainland, spent our money in a foreign country and made lots more money on the house we owned in Fort Langley.
Looking forward, we are now going to be affected by this NDP proposal. As we are aging and may not be able to stay on our property indefinitely, we decided to invest in the economy of Victoria by buying a condo 5 years ago. We could have invested in some obscure eastern based companies via the stock market, but decided that we needed to get into the housing market before the Vancouver speculative market affected the Victoria market.
Currently we participate in a choir that raises significant monies for a choir program in Victoria elementary schools. We also contribute to the local restaurant, grocery and other businesses.
And we do rent our condo out when we are not using it. Usually the renters are those who plan to settle in B.C. or are escaping a prairie winter. They bring a stimulus to the economy also.
Is this speculation? Does this careful life planning need to be penalized by a government that is doing a āknee jerkā reaction to the problem of true speculators.
We urge you to reconsider your support of this proposal. This is not going to further the goals of the Green Party but will actually detract from it.
Bruce and Dana McConchie
Hi Adam,
We began construction of a retirement home on Galiano Island 4 years ago and have just received our occupancy permit.
My wife and I are beginning to wind down our careers in Vancouver but will not be ready to unplug for another couple of years.
This proposed tax would seriously compromise the plans weāre so close to realizing. And as youāve pointed out, would not be a real solution to problem itās intended to address.
I would advocate for shelving it until a more carefully considered solution can be implemented – one that doesnāt wreak collateral damage on unintended victims.
Hi Adam;
We fully understand the economic and political desire of the government to increase the accessibility and affordability of housing in certain “hot” markets in the province. However, the “bold” initiative of the Finance Minister misses the objective by a mile. It seems to have been poorly considered despite reference to the academic credentials of the advisors in an attempt to add credibility to the proposed Speculation Tax. As proposed, it will hurt many but particularly the people it purports to help.
We are retired Canadians who lived, worked and raised our family in the Vancouver area for many years before moving to Alberta for economic opportunity. We vacationed on Salt Spring Island for 15 years before purchasing our dream property on one of the Gulf Islands in 1987. Our family resides in Victoria, Vancouver and Calgary so we travel back and forth frequently during the year to keep in touch and enjoy seeing our grandchildren grow and mature. We spend over 130 days a year in British Columbia. We are not speculators in BC real estate and forcing us to sell our Gulf Island property after 30 years of investment in a wonderful community will be devastating.
Please continue to press the government to define their objectives and to bring forward legislation that will provide a framework and incentive for additional affordable housing in “hot” urban areas of the province. The Speculation Tax as proposed will reduce long-term capital coming into British Columbia; will induce a dramatic fall in new housing in the defined areas and will erode the value/equity of existing housing.
Dear Adam,
I fear I am like a little salmon swimming against the tide here, but I am very glad and grateful that the provincial government is taking this issue of insane speculation seriously and trying to figure out what to do about it. Thank you Greens and NDP for working hard to help figure out how to make homes more affordable for local people. It’s about time.
I agree with you that statements were made prematurely, before due consideration and input, but that does not diminish the need to do something to regulate and protect our housing market from offshore money.
I propose that everyone complaining about the unfairness seriously offer up some sound ideas and considered alternatives with the aim of helping solve the housing crisis in Vancouver / Lower Mainland / Victoria / Saanich. The insane rise in prices has made housing unaffordable and who are suffering? Our young people, local families, hard workers, and our retirees.
I have to admit to having limited patience for those who can afford a second home – that’s pretty sweet, to own two homes! It is reasonable to expect to have to pay for those homes, especially if one sits empty most of the time, regardless of where it is. We have to pay for our choices in life. Various things such as reno costs and tax increases often scupper plans. C’est la vie.
I wish everyone who is so concerned about this potential hit to their wallets were also as concerned about human-caused pollution and global warming! I wish people cared as fervently about the endless plastic detritus on all our shores, in our seafood, choking the ocean and every creature in it. I wish people were as informed about and opinionated on the worrying potential for an oil spill from increased Kinder Morgan traffic. An oil spill on our shores will scupper property values and result in increased taxes in order to pay for clean up. I wish everyone was writing and shouting about the fact that, thanks to global warming, there is 10% more moisture in our atmosphere feeding ever more dangerous storms, which raise insurance rates on all our homes no matter where we live. That’s my two cents š
Hello Adam,
I am a Maple Ridge resident who owns property on SSI. I grew up on SSI and have family here currently. Three years ago my wife and I purchased some property and built a modest size house for us (family of four) to enjoy during the summer and on other weekends and holidays. I gave up two years of weekends and holidays to complete much of the work myself. It was the only way I could afford this project. I put a great deal of time, blood, sweat and tears in bringing our project to completion. We do not wish to rent it and we cannot afford to keep it if we are forced by our govt to pay 12000 extra a year on a tax designed to keep speculators from jacking up house prices. This will be devastating for us and I did not expect to be penalized by my own govt for my investment and hard work. This is not the govt I voted for. This is unfair and hurtful.
I am sending this note as an official protest towards this tax and the heartache and financial stress it puts on British Columbians who work hard for what they have, those who have chosen to invest back into the Province we live in. My project has invested a great deal of money into the SSI comunity and continues to do so. To get slammed by a tax that would force us to give up our Island residence is nothing short of offensive.
Thank you for your attention
Chris
Dennis Fortin
Adam, thank you for providing this forum for comment.
Does it seem strange that every government solution to a problem somehow enriches the treasury.
This proposed tax is misguided and an attack on individual home ownership.
The real problem one of supply and demand as well as the criminal element and money laundering. A google search on the topic reveals how prevalent this is. The Globe had a particularly good article.
https://www.theglobeandmail.com/news/investigations/real-estate-money-laundering-and-drugs/article38004840/
Letās stop pretending that a few percentage points will dissuade folks who have millions of dollars to shuffle around from looking for some hard asset in a safe jurisdiction as a way to legitimize their wealth.
The real estate industry in B.C. is a major contributor to the economy and employs approximately 20,000 people. It is estimated that Government revenue from housing is between two and three Billion per an. Metro Vancouver estimates that 525,000 new units will be required by 2040. Urban planning forecasts about 250,000 unit by 2040. Please explain how a 2% take fixes that imbalance. The bureaucratic costs are additional headwinds to reducing the cost of housing. In metro Vancouver permitting costs exceed $50,000 per unit. Here on Salt Spring we have not one but several authorities to deal with; the Trust, CRD, and perhaps NSSWD to name a few.
The Federal Government is also trying to kill the real estate market with more restrictive lending rules. Of course the Bank of Canada continues to encourage debt and leverage by keeping interest rates at historic lows. They and other Governments, through their monetary policies have overseen creation of the largest debt bubble in history. We have seen what happens when these bubbles collapse. Please recall US housing during the financial crisis. Itās all fine as long as prices are on an upward trajectory, but when falling prices meet mortgage debt, it is not pretty. There are nearly two million homeowners in B.C, a lot of them with very little equity.
All these measures will have a cumulative effect, the losers in all of this will be the economy and the average Canadian whose home is likely his or her single biggest asset.
Beware of unintended consequences.
Nobody takes issue with the fact that there IS a problem. It is just that the proposed Speculation Tax will kill the patient in many areasā¦. like the Gulf Islands for instance.
Prompted by the Speculation tax, ALL real estate will tumble again just as it did 10 years ago on Salt Spring when the Americans pulled out in 2008 and others followed. Real estate based taxes will drop on ALL real estate held by devoted locals, committed residents and speculators. Oh, thatās right, we donāt have any speculators.
On Salt Spring Island (and Whistler) more tax revenue will be lost in the universal decline of the value of ALL real estate, and the reduced sales of goods and services to those off island land owners than will be clawed back by the ill conceived speculative tax.
Oh, and businesses will fail and /or close and nobody will be building new housing, low income or otherwise. Ergo fewer resourses for needed social programs, not more. Even talk of such things has a deleterious effect.
My husband and I are born and bred Canadians who went overseas to work. We built our one and only house in the world on Saturna Island with all our life-savings. We visit there 2 times a year. The rest of the time we live in a run-down rental in Korea. We didn’t take any houses off the market because we built a modest home and actually increased the property taxes for the island. We spend our money in Saanich and on Saturna. With the speculation tax, we can’t afford to visit more than once a year, if that. And we can’t afford to improve our property, buy goods at the General Store, and employ people on Saturna. When we do come, it has to be Costco and Amazon, or do without. OR put a complete stranger in our home and somehow be a landlord from Asia? Is this fair to the renter? Is this a fair choice for us?
We thought we were doing the right thing for our future. This B.C. tax is going to kill our future and the economy on Saturna.
No, our home is not empty. It is filled with our hopes, dreams, and life-savings.
Please remind me … since when has it become “immoral” for a Canadian to own a second home or a vacation property?
Ron Cooke Personally, I am quite glad that this new tax is being levied. Having been deeply involved in the affordable housing crisis here on Saltspring, I see this as a powerful tool with a positive outcome at both ends – making it much more difficult for land speculation, money laundering, AirB&B abuse, and empty houses, while at the other end the funds garnered being used to create and support affordable housing.
Having said this, it will be incumbent on the powers that be to ensure that there is fair and balanced arbitration to ensure that the many borderline cases, and there will be many, can state their case and be treated fairly. The intent is not to place undue hardship on those who are legitimate home owners, but rather to ensure that our housing stock is not being played and sidetracked into money making schemes.
When I contemplate ‘ How did we get here? ‘ in relation to the affordable housing crisis, I see two primary mitigating reasons – the first being stagnant wages over the last 20 years or more, but also the fact that real estate has become a money making tool that has driven the cost of home ownership of even a modest home way out of the reach of more and more young families, and rental costs through the roof. We have allowed our desire to be a free market society – particularly where real estate is concerned, to basically remove those of modest means ( and this is the most of us ) from the housing market. This is a situation that has become intolerable – we have allowed it to happen out of greed and indifference, and we are now at a severe tipping point and it is we the people who must take the situation in hand and correct it. It will be painful for some, and it must be done fairly. This particular tax is aimed at those who are the worst offenders – and it is definitely where we need to start.
After years of hard work, saving and paying taxes in BC, my husband, children and I decided to buy a piece of land on SSI in 2016. As we built our new “small cabin”, things changed for us. We grew to love the island and the community so much that our “small cabin” became a home that we plan to move into once we sort out our family’s job and school situations. We were hoping to move in the next five years and to enjoy it thoroughly in the meantime. We finally received our occupancy permit in December of last year and 2018 will be our first full year in the completed home after camping out on the property for two years. It is also the first year the proposed tax will apply to us, which will eventually be $18000 per year.
Like most others, we had no idea the tax was coming and did not build or furnish our home to be rented. We really do use it all the time and have been signing our kids up for programs and participating in community events. We spend money in the community on a regular basis throughout the entire year – not to mention the money and jobs we contributed to the community in building the home. Despite our intention to be contributing members of the community, the tax is creating division in the community about whether people in our situation are welcome. Worse, we may be forced to sell our brand new dream home and hopes for our future. We feel like we were charmed by island life and now we’ve been duped.
After seeing the City of Nanaimo and West Kelowna supporting, defending and valuing their residents in our situation by stating that they want to be exempt from the tax, I’m wondering how you will support BC residents like us and show us we are valued? Or are we truly not? Will you be formally requesting the CRD be exempt for at least BC residents? Will you be letter writing and holding town halls as Kelowna has?
We are happy to pay our fair share – even in the form of some tax – but the speculation tax appears to be targeted extortion. Realistically, our property will never become land for affordable housing on the island; if we are forced to sell, it will likely sell to someone far richer who can afford the tax or perhaps a real speculator will buy it.
Hoping to be a part of the SSI community and that you will take actions to ensure that we are treated fairly,
Renee Hall
P.S. How did Whistler get out of this?
Why does the government need my SIN to complete the speculation tax form? The home owners grant already shows that I am a Canadian citizen or permanent resident and the property is my principal residence. It seems that this is information that does not need to be with another government agency.
Thank you for reaching out to our office about the Speculation and Vacancy Tax. We have heard from many people who have concerns with this tax and its rollout. In accordance with our Confidence and Supply Agreement, government consults with our caucus on many matters. All input we provide government is aimed at producing evidence-based public policy that will deliver outcomes that are in the best interests of the province as a whole.
Requiring a SIN is a requirement for many provincial programs, including disability benefits and welfare programs. Iāve received this directly from the Ministry of Finance regarding their ability to collect SINs for the administration of this tax:
By levying the highest tax rate on foreign owners and satellite families (those who earn a majority of income outside the province and pay little to no income tax in B.C.), the speculation and vacancy tax is a way to make sure these property owners are paying their fair share in taxes.
Social Insurance Numbers (SIN) are fundamental to British Columbia and Canadaās taxation system. The Speculation and Vacancy Tax Act, subsection 64(1) authorizes the administrator to collect information from property owners through the annual declaration in order to administer the act. Requiring personal information, including the SIN, is necessary for the administrator to determine tax liability, identifying whether property owners pay income taxes in Canada and whether an individual may be eligible for a tax exemption or BC tax credit.
The collection of SIN is crucial to identify whether home owners pay tax in Canada and to confirm residency information. This information is relevant to ensure individuals that live in their home, and are eligible, receive the principal residence exemption. In addition, residency information is required to determine the amount of tax an individual is subject to, and, if applicable, the amount of speculation and vacancy tax credit an individual may receive.
The SIN is one piece of personal information that is collected through the online declaration application. eTaxBC is the online secure government application that is used for the declaration process. All information entered into eTaxBC is encrypted at the time of entry. Once a SIN is collected it is masked and the ability for employees to view the number is controlled by security access on a need to know basis. The personal information that is collected under the Speculation and Vacancy Tax Act is protected in a manner consistent with the BC Governmentās Information Security Policy, Federal Security Standards, and provisions of the Freedom of Information and Protection of Privacy Act.
For more information, a complete list of exemptions, and to learn what is new or has changed about the speculation and vacancy tax, please visit the speculation and vacancy tax website.
When the government first announced they would be introducing a tax targeting speculation the Green caucus arranged for briefings, posed questions to the Minister, met with concerned residents and put pressure on the government to clarify unknown details about the proposal. In late March government released a second intentions paper outlining a series of thresholds, exemptions and refinements to the geography of affected areas.
When the legislation to enable this tax was introduced in the fall Adam and the BC Green caucus indicated they would not support the tax in its proposed form. Through the Confidence and Supply Agreement the government recognized several of our concerns and supported three amendments to the proposal:
ā¢ Mayors from affected municipalities would be part of an annual review process with the Minister of Finance that required the Minister to provide metrics that justified keeping the speculation tax in place in their community;
ā¢ revenue raised by the tax would be used for housing initiatives within the region it came from;
ā¢ the speculation and vacancy tax rate for all Canadians was the same ā this brought the rate for non BC-resident Canadians down from 2.0% to 0.5%.
However, the implementation of this tax was left to the government. Andrew Weaver wrote in his blog that he was told that the process was going to be easy and transparent, like what is already in place for people claiming the Homeowner Grant. You can read more about this here: http://www.andrewweavermla.ca/2019/01/19/botched-rollout-bc-ndps-speculation-vacancy-tax/
The BC Greens recommended several alternate approaches to government on how to better deal with the housing crisis. First, they suggested that government introduce enabling legislation to allow local governments to implement a vacancy tax if they felt it was necessary for their communities. Victoria, for example, has asked for the powers to introduce such a tax. Enabling the ability of local governments to introduce a vacancy tax is relatively straightforward. The legislative language already exists in the Vancouver Charter.
Three benefits of this approach are that any monies raised would remain in the affected community, its implementation would be highly focused, and the issue of double taxation in the Vancouver area would be addressed. Should vacancy or rental shortage issues no longer be a problem, local governments could also respond rapidly without the need for provincial legislation. In addition, we recommended the closure of the bare trust loophole and the introduction of a flipping tax – a tax levied on people who flip properties, buying and selling them in a short timeframe for significant profits.
The information that we provided government regarding the speculation tax was that it should be as targeted as possible in addressing speculative activity in the housing market. We also communicated that government should work to minimize unintended consequences on people and activity we donāt want to target, without fundamentally undermining the impact of the tax.
Moving forward, our caucus will continue to ensure stability, transparency and accountability in the BC Legislature.