The intent of the new speculation tax imposed by the province of British Columbia is to target foreign and domestic speculators in BC, these being homeowners who have removed their units from BC’s long term stock — meaning they are not owner occupied or a qualifying long term rental property.
The tax rate this year is $5 per $1,000 of assessed value, which will increase to $20 per $1,000.
Right now, the tax only applies to Metro Vancouver, the Fraser Valley, capital and Nanaimo districts on the island and Kelowna and West Kelowna.
While the intent may target foreign speculators, Columbia River Revelstoke MLA Doug Clovechok says that nobody thought about the ripple effect. Regardless of the fact that the tax does not apply to the Kootenays — yet — Clovechok says communities in this riding are feeling the uncertainty.
“My offices are being absolutely inundated with phone calls from British Columbians and Albertans,” he said.
While the tax does not cover this area, Clovechok says that people are either unaware of that or feel that it could in the future.
“There has been a $10 million project put on hold in Radium, a hotel project at one of our ski areas has been put on hold, another half million dollar project in Golden is on hold. It’s having a dramatic effect on us already,” he said.
“These projects that are being put on hold, that is directly taking jobs out of our communities.”
Clovehcok says he had an extensive visit with Finance Minister Carole James last week.
“I told her that I understand what they are trying to do with speculation in Vancouver, but that’s not happening in the Kootenays. She says she doesn’t believe the tax is coming to the Kootenays. I asked for that in writing. I have since sent two letter to her office requesting that promise in writing and i haven’t heard back.”
“The level of uncertainty in our riding is rising. I don’t think they thought this through. Nobody asked if it would have an impact on this area or other rural areas. Albertans are incredibly angry about this. We are picking on fellow Canadians. Canadians shouldn’t be penalized by other Canadians.”
Clovechok says it already affects people in this riding who may have a second property elsewhere in the province. He says that while the government promises tax rebates for those situations, he doesn’t believe those rebates will fully reimburse the costs.
And Clovechok also believes that whatever the intent of the tax, it’s not going to drive real estate prices down in Vancouver nor will it create opportunities for more social housing.
“Social housing is an important issue and something I am discussing with mayors in this riding. Yes, we need more social housing but we don’t need it on the backs of our neighbours.”
Clovechok urges people to contact his office if they have any more questions about the speculation tax.