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.

Just Posted

Kelowna Chamber of Commerce hears cases for and against proportional representation

Official proponent and opponent speak about the pros and cons of changing how we vote provincially

Cirque du Soleil’s Corteo comes to captivate Kelowna

The show premiers Oct. 17 at Prospera Place

Kelowna mayoral candidates spar over support

Tom Dyas claims Colin Basran’s former campaign manger from seven years ago ‘abandoned’ him

WATCH:Tommy Chong has a special message for Kelowna

Chong was meant to attend a legalization day party that has now been rescheduled

Temporary detour on Boucherie Road detour changes

The detour will be Oct. 19 and 20 for paving

Watch it again: Kelowna mayoral candidates square off

Missing the LIVE Kelowna mayoral debate watch now

Jagmeet Singh says marijuana pardons are not enough

Trudeau government will streamline pardon process for Canadians convicted of simple possession of marijuana in the past

BC Ferries begins taking debit in two-month pilot project

Company is giving customers option to use Interac on two-month trial on select vessels

Caregivers banned from smoking, growing cannabis around children-in-care: MCFD

Ministry has limited cannabis use for caregivers, stating it may “pose a risk to children and youth.”

Cheaper strains sell out within minutes on online BC Cannabis Store

Province says new strains will become available in the coming months

Only 40% of B.C. car dealerships have electric cars available: report

Researchers found buyers frustrated at the lack of options

VIDEO: Millionaire Lottery returns to give back and win big

Since 1996, Millionaire Lottery has raised $52 million for the VGH+UBC Hospital Foundation

Most Read