Staff Report: Speculation Tax Exemption

Staff Report: Speculation Tax Exemption

Date: June 18, 2018
Department: Planning
Subject: Speculation Tax Exemption

BACKGROUND

The Province of British Columbia is proposing to implement a speculation tax as a means of tempering speculation in the housing market and encouraging homeowners to add their vacant properties to the province’s rental housing stock. The tax will apply in the Metro Vancouver Regional District (excluding Bowen Island and Electoral Area A, except the part of the electoral area that is the UBC and University Endowment Lands), the Capital Regional District (excluding the Gulf Islands and Juan de Fuca), Kelowna-West Kelowna, Nanaimo-Lantzville (excluding Protection Island), Abbotsford, Chilliwack, and Mission. The tax is administered outside the municipal property tax system and property tax cycle, and requires non-resident homeowners to pay a yearly tax on the assessed value of their homes.

COMMENTS

The proposed speculation tax risks damaging our local economy and reducing the number of available jobs without providing realistic stimulus to increase the supply of affordable housing in British Columbia.

Specifically, the proposed speculation tax will:

• Negatively impact long-term, non-resident owners who are purchasing property with the intention of moving to British Columbia once they retire;
• Reduce the revenue available to the Province and to local governments, thereby reducing the number and quality of services and amenities that can be provided;
• Encourage non-resident property owners to “flip” properties more frequently to avoid the ongoing tax that is based on annual assessed value; and
• Devalue people’s homes by 20-30% without creating any affordable housing.

As one of the fastest growing municipalities in Canada, the City of Langford has made housing affordability a priority by reducing bureaucratic barriers at the municipal level through innovative zoning regulations and a fast tracked permitting system. The implementation of this tax will work against these efforts and may ultimately be passed onto tenants and home buyers, further impacting housing affordability.

OPTIONS

Option 1

That Council adopt the following resolution:

Whereas the British Columbia Speculation Tax imposes an unfair tax burden on British Columbians and other Canadians who wish to purchase or own a second home in British Columbia, and;

Whereas the tax was imposed on municipalities without consultation or economic modelling of its impact, and;

Whereas the Government of British Columbia has already removed Parksville, the Gulf Islands, the Juan de Fuca Electoral Area and other areas due to pressure from various Members of the BC Legislature and;

Therefore be it resolved that the City of Langford calls upon the BC Government to allow municipalities to opt out of this new housing speculation tax and;

Be it further resolved that the City of Langford calls upon the BC Government to put any funds received from a speculation tax on housing towards an affordable housing fund and;

Be it further resolved that the City of Langford put the resolution for debate and consideration at the 2018 UBCM Convention in conjunction with a covering letter from the Mayor.

Option 2

Take no further action with regard to requesting exemption from the Speculation Tax.

Respectfully Submitted,

Submitted by:
Dave Sametz, Land Development Planner

Concurrence:
Matthew Baldwin, MCIP, RPP Director of Planning

Concurrence:
Cory Manton, Manager of Parks and Recreation

Concurrence:
Michelle Mahovlich, P.Eng, P.Geo, Director of Engineering

Concurrence:
Michael Dillabaugh, CPA, CA, Director of Finance

Concurrence:
Braden Hutchins, Director of Corporate Services

Concurrence:
Darren Kiedyk, Chief Administrative Officer

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