A vacation getaway in the West Kootenay. Eastern and coastal B.C. are popular retreats for Albertans. (Black Press files)

B.C. speculation tax applies to out-of-province homeowners

Albertans with Okanagan, Island properties hit, Kootenays could come later

With a trade battle between B.C. and Alberta heating up, Albertans with B.C. vacation properties will soon find out if they are in for a hefty property tax increase.

Finance Minister Carole James unveiled B.C.’s new “speculation tax” in this week’s budget, the first in Canada. It targets vacant homes in an effort to discourage foreign investors from pushing up urban real estate prices by parking money in a hot market.

James confirmed that the speculation tax will apply to vacation homes owned by Canadians from other provinces. Like the foreign buyers tax, which B.C. is increasing from 15 to 20 per cent, the speculation tax is extended beyond Metro Vancouver to the Fraser Valley, Nanaimo, Central Okanagan and Capital Regional Districts.

That includes Kelowna, West Kelowna, Greater Victoria, Parksville, Qualicum Beach and other communities popular with Albertans as holiday and retirement homes.

James said Thursday the speculation tax may be extended to other areas later. Kootenay communities have long struggled with high housing prices and a shortage of rentals as Albertans have bought up mountain properties for summer and ski season getaways a short drive from Calgary.

RELATED: Revelstoke’s rental crunch

RELATED: Parksville aims for rental relief

The speculation tax requires legislation to be passed this spring. It is to begin at 0.5 per cent of property value, rising to two per cent later in the year as promised by the NDP in their election campaign.

“If you pay income tax in British Columbia you are not captured,” James said. “If you’re from outside the province, and you leave your home vacant, you will be taxed.”

The finance ministry has not yet defined “vacant” as it applies to a holiday getaway that may be used a few times each year by an out-of-province owner. Finance officials say to avoid the tax, owners will have to have a “long-term rental” rather than short-term deals through such services as AirBnB.

But James said the tax is designed to persuade people to offer their second residence for rent when they’re not using it.

“If you want to ensure that you don’t pay the tax, you put your house on the rental market and you encourage people to rent it,” James told reporters after a post-budget speech to business owners in Victoria.

The speculation tax will be administered outside the existing property tax system. Notices are to be mailed out to direct out-of-province property owners to a finance ministry website that will detail the various exemptions. Paper and phone options will also be offered.

BC Budget 2018BC legislature

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Central Okanagan school superintendent addresses technology’s impact on students

Physical and mental well being for students key themes during Kevin Kaardal’s presentation

Westbank First Nation Grand Chief Noll Derriksan passes away

Derriksan was 79 at the time of his passing

Kelowna to introduce new strategy for community education about supportive housing

The model seeks to enhance community engagement, accessibility and transparency

GoFundMe campaign started for young Kelowna girl in need of service dog

Alena suffered from an in utero MCA stroke, that affected most of the right side of her brain

Summerhill Winery proposes college for sustainable food production

The proposed Culinary College for Humanity will help to develop a sustainable food culture

VIDEO: B.C. senior recalls ‘crazy’ wartime decision to grab bear cub from den

Henry Martens – now 96 – says he was lucky to be alive after youthful decision to enter a bear’s den

Gas drops below a dollar per litre in Penticton

Two stores in Penticton have gas below a dollar.

Pawsative Pups: You have a new puppy, now what?

Lisa Davies is a new columnist for Black Press who writes about dog training

Loans or gifts? Judge rules woman must pay B.C. man back $7K

B.C. judge rules that woman must pay back more than $7,000 in advanced funds to man

VIDEO: Outpouring of worldwide support for bullied Australian boy

Australian actor Hugh Jackman said ‘you are stronger than you know, mate’

Sewer service planned for South Okanagan community of Kaleden

Regional District of Okanagan Similkameen plans to extend Okanagan Falls system into Kaleden

‘A horror show:’ Ex-employee shares experience at problematic Chilliwack seniors’ home

Workers are paid below industry standard at all Retirement Concepts facilities

Forest industry protests northern B.C. caribou protection deal

B.C. Mining Association supports federal-Indigenous plan

Youth-led report calls on B.C. government to create plan to end youth homelessness

There are no dedicated programs for youth homelessness at federal, provincial level, report says

Most Read