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

ARTS AROUND: Join watercolour workshops in Port Alberni

Victoria artist Joanne Thomas will provide beginner and advanced classes

‘Beauty amongst such tragedy:’ B.C. photographer captures nature’s trifecta

David Luggi’s photo from a beach in Fraser Lake shows Shovel Lake wildfire, Big Dipper and an aurora

Bullhead derby returns to Port Alberni with new date, location

Lions Club partners with Maritime Discovery Centre

Vancouver Island woman to attempt historic swim across Juan de Fuca Strait today

Ultra-marathon swimmer Susan Simmons to attempt to swim from Victoria to Port Angeles and back

Port Alberni RCMP honour fallen officers from New Brunswick

Moment of silence, prayers held for Fredericton officers killed last week

‘We will not forget:’ Thousands attend funeral fallen Fredericton officers

Hundreds of officials marched in the parade, which included massed band, several police motorcycles

RCMP looking for missing Duncan teen

Dallas Macleod, 18, was last seen on Aug. 10

Evacuation order issued in Island village due to “risk of falling debris”

Fire continues to threaten town’s only access road

B.C. man designer behind Canucks’ retro jersey

Jeremie White was 20 years old when he told Canucks assistant GM Brian Burke he had a design

Lions give up late TD in 24-23 loss to Argos

B.C. falls to 3-5, fumbling away last-minute chance in Toronto

Eagle tree cut down legally a 1st for B.C. city

Planned eagle preserve ‘a first for City of Surrey’

Smoky skies like a disappearing act for sights, monuments around B.C.

Haze expected to last the next several days, Environment Canada said

Canadians react to death of former UN secretary-general Kofi Annan at age 80

Nobel Peace Prize-winning former UN leader died early Saturday following a short illness

Most Read