Vernon council slams speculation tax expansion as way to 'fill the coffers'

Spec tax way to 'fill coffers'

Councillors had some choice words Monday on the provincial government’s decision to expand the B.C. speculation tax to Vernon.

Council has been quiet about the legislation since it was announced Nov. 22, but at Monday’s meeting did not hold back.

Coun. Kari Gares and Coun. Akbal Mund said the move feels like a cash grab by the provincial government.

“Let's call a spade a spade, this is nothing more than just a way to tax somebody to fill the coffers, and I think that's just a wrong premise,” said Gares.

“It's just a tax grab is what I think it is. It’s just ‘well, we’re gonna get more money from (it), we’ll use the housing crisis as an explanation and bingo, here we go,’” said Mund.

The expanded 0.5% tax on the assessed value of vacant second homes (2% for non-residents of Canada) was first introduced in 2018 and already applies in many cities across B.C., including nearby Kelowna and West-Kelowna.

Gares, a mortgage broker, said the tax had unintended consequences when first introduced because investors chose to buy in places without the tax. So, somewhere without the tax, like Vernon, had its housing market driven up, something she said could happen this time in neighbouring municipalities such as Armstrong.

Homeowners in the added communities will need to declare for the first time in January 2025, based on how they used their property in 2024. Mayor Victor Cumming said that doesn't leave a lot of time for affected property owners to figure out what to do.

Coun. Brian Quiring said the province should not be implementing both the speculation tax and its short-term rental regulations, saying, “It's a real double whammy for us."

“If you didn't mess with the short-term rental regulation, then you impose the speculation tax, people could likely still live with it," said Quiring.

He said he would be happy to support the speculation tax if the government were to eliminate new short-term rental rules that require owners live on the same property. He said having both is going to “absolutely hammer” the local economy, where a significant amount is based on tourism.

Coun. Teresa Durning agreed with other councillors saying, “I'm absolutely appalled by the provincial government’s overreach.

“(Putting this) on any community, the speculation and the vacancy tax, the double whammy, the impact on tourism alone for them to do this is absolutely astronomical for an area like Vernon, and I'm completely disappointed.”

Coun. Brian Guy supported two requests suggested by Cumming.

“For a simple, quick, and fast staff analysis, and your request to pass on the info to the minister of housing and the minister of finance. I would suggest both in written form by a letter, and then phone calls as well, where you can expand the letter,” said Guy.

Council passed a motion for Cumming to write letters to both ministries, asking for exemptions for city resort areas.

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