Says spec tax didn't work

I am a proponent of short-term rentals and believe the provincial government has unfairly treated those who own them.

I have rented them before, and found them to be a lot nicer and more economical than having multiple hotel rooms. It is the only way to go with a family or a group of friends.

I believe the government took this approach because the Speculation and Vacancy Tax is not having the desired effect by returning more units to the rental pool. I believe many owners are paying the penalty and leaving their homes empty.

There is was a story on Castanet in 2021 (Spec Tax Raised $88 million) that explained it pretty well.

The story reported that in 2019, the government raised $88 million of which 92% was from foreign owners. The tax for foreign owners was 2% of assessed value in 2019, whereas a B.C. resident only pays 0.5%. The 92% worked out to be $80.96 million

The only problem with the report was it did not say how many units were being taxed or what the average assessed value was.

If we take an average assessed value of $1 million for each property in 2019 and use 2% as the tax rate, it works out to $20,000 per unit. If you divide $20,000 into $80.96 million, it equals 4,048 units the owners paid the tax on and were not available for rent.

I know the $1 million assessed value is not 100% accurate but with all communities affected by this tax, I would think this figure was reasonably close back in 2019. That means to me, the tax did not do as it was intended, and we still have a housing shortfall.

Brian Godfroid