B.C. Premier John Horgan acknowledges a proposed housing tax aimed at out-of-province homeowners could have “unintended consequences,” and says his Finance Minister plans to address those issues soon.
The NDP government announced what it is describing as a speculation tax in last month’s budget. The new policy would add 2 per cent to property tax bills in B.C.’s six regions if the owners are located outside Canada or from another province.
Municipalities including the City of Kelowna say they want out of the tax, complaining that it would be a burden to Canadians, including British Columbians, with vacation homes as well as hurt communities that rely on those part-time residents.
“The unintended consequences have become apparent and Minister James will address those in the weeks ahead,” Mr. Horgan said at an unrelated event on Wednesday in Vancouver.
Mr. Horgan said his government acted to address concerns over speculation in the province’s housing market, which was creating issues around affordability.
The Premier said his office spoke this week to a representative of the City of Kelowna, . But he also suggested that the government’s housing measures have a lot of support.
“I have to tell you that there are a whole bunch of people who are cheering us on, saying we need to stem the speculation, we need to bring the prices of houses into a place where people who live here can continue to stay here, rather than moving father afield,” he said.
“It’s important that we remember where we were 12 months ago, rather than where we were 12 days ago,” he added, taking a shot at the previous BC Liberal government.
But Opposition Leader Andrew Wilkinson, the leader of the BC Liberals, said the NDP has blundered into a terrible situation wherein they are basically having to revise their budget, which introduced the tax, as days go by.
“They didn’t think this through. They put together a half-baked tax package and now, when people raise the obvious concerns and objections, they are talking about changing things on the fly,” Mr. Wilkinson said in an interview.
He said the unsettled situation may deter investment in property in B.C. while it is worked out. The most basic feature of a budget, he said, is that it is set when presented and not revised over time.
“This is a sign of a government that has not done its homework.”
On Wednesday, the chairperson of the Regional District of Nanaimo said that Finance Minister Carole James and two staff met with them for an hour on Tuesday,
“Given the demands on [her] schedule, this was an exceptionally long meeting and I am very grateful. It was positive and collegial,” Bill Veenholf said in a statement.
Doug Findlater, the mayor of West Kelowna, said that he also met with Ms. James Wednesday.
“We made our case,” he said. “They were very non-committal. We’re hopeful in the mix of all this that West Kelowna can be exempted [from the tax].”
The tax was among a series of housing measures in the February budget. The government also expanded an existing tax on foreign buyers and introduced new taxes on homes valued at more than $3-million. The government says those will be applied on top of municipal taxes, including Vancouver’s recently introduced tax on vacant homes.