Steve Trimble's family has owned their cabin for nearly four decades. They spend Christmas holidays there. Summer there. Long weekends there. They pay property taxes and someone else to cut the grass.
The getaway is in B.C.'s Columbia Valley, a popular stretch where Albertans – particularly Calgarians – play. Vacation homes, cabins and condos are as prominent as the mountains in the area, which is part of the Kootenay region. Folks with ties to the area, whether local or otherwise, are worried the B.C. government may increase taxes here on vacation properties owned by people who live in other provinces. Mr. Trimble's place is between Invermere and Windermere, in the heart of a popular stretch anchored by Lake Windermere.
"I don't want to be put in a position where I might even consider selling," Mr. Trimble, a Calgarian, said. "It is the home that means the most to us."
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This week, B.C. rolled out a budget with provisions the government hopes will make housing more affordable in heated markets. One proposal, which B.C. calls a speculation tax, would jack up taxes on properties often left vacant and owned by people such as Mr. Trimble's family. The B.C. government excluded the Kootenays from this proposal, but has mused the policy could be expanded. Because areas just over the southern border between Alberta and B.C. – think popular tourist destinations such as Fernie, Invermere, Windermere and Radium Hot Springs – are thick with vacation homes owned by people from other provinces, there is fear the Kootenays could be next.
Albertans dominated the real estate market in the area in 2017. Roughly 47 per cent of the buyers in Invermere originated from Alberta in 2017, according to statistics produced by the Kootenay Real Estate Board. In Invermere's rural area, that figure climbed to 65 per cent. At Panorama, it clocked in at 70 per cent. It was 65 per cent at Radium Hot Springs. The data do not indicate whether the buyers purchased vacation, retirement or permanent homes, but the area is known for vacation properties and as a place where out-of-province buyers purchase vacation homes with the intention of retiring in them years later.
The potential fallout, should B.C. extend its proposed tax to the Columbia Valley and its neighbouring areas, would hurt locals more than outsiders, according to critics who reside in the Kootenays. Barry Brown-John, a director on the Kootenay Real Estate Board, argues local businesses would be damaged if Albertans packed up.
"With vacation properties, they use lawn services, they use home [security] watch," he said. "They employ a lot of people in the valley."
Mr. Brown-John works out of Invermere, which sits on Lake Windermere and at the base of the road that winds up to Panorama Mountain Resort. He is also a developer and notes that construction would slow if Albertans shied away.
"This community doesn't have a major industry. We rely on service industries a lot to feed and employ people in the valley," he said.
B.C.'s government, under Premier John Horgan, released its budget Tuesday. Mr. Horgan leads the New Democratic Party and the government is propped up by the provincial Green Party. The government has pledged to make housing more affordable in the province. Its strategy includes increasing the province's tax on foreign buyers to 20 per cent from 15 per cent and introducing the out-of-province tax. That annual levy would be 0.5 per cent in 2018 and increase to 2 per cent on the assessed value of the property in subsequent years for homeowners who do not pay B.C. income tax.
A beach shared by seven families in B.C.’s Columbia Valley, where Calgary resident Steve Trimble owns a vacation property.
Steve Trimble
For now, the two policies apply to Metro Vancouver, the Fraser Valley, the Vancouver Island regions of Victoria and Nanaimo, and the municipalities of Kelowna and West Kelowna in the Southern Interior. Kelowna is a popular vacation and retirement destination for Canadian residents who do not live in British Columbia, again with Albertans pouring in.
Norm Letnick is the B.C. member of the legislature for Kelowna-Lake Country and sits in opposition benches. The government's proposed tax, he said, will just shift the affordability problem to other recreational and retirement destinations in the province.
"The marketplace would say: 'Well, Kelowna or West Kelowna are covered by the tax, but Lake Country or Peachland, which are very close, are not,'" Mr. Letnick said. "They are great communities as well, so why not go there?"
Critics also argue the tax will not fully address the affordability conundrum because wealthy out-of-province owners may choose to foot the bill rather than sell. Further, Mr. Letnick and others argue the tax may dampen housing starts, which could exacerbate the affordability problem.
"If you want to provide more housing or [make] housing prices more sustainable for the average person, then you need to really focus on the supply side and increase the number of units that are being built in smaller footprints," he said.
Back in the Columbia Valley, residents such as Stacey Neumann consider what would happen to both businesses and the real estate market should the tax extend to their area.
Because the region is so popular with Albertans and other out-of-province property owners, the Columbia Valley could find itself short on buyers.
"If Albertans aren't looking to buy here, who's going to be looking to buy these properties?" Ms. Neumann said.
"We're basically Alberta's playground, because Calgary is only three hours away," she said. "Our businesses here rely on the Albertans. In the spring and summer, they're out here, that's how the businesses here make their bread and butter."
An out-of-province tax would hurt the Kootenays more than help, Ms. Neumann said. "Look at all the small businesses in the town," she said. "If they had more of a drop in business, I don't know if some of [of them would make] it through the winter."
Mr. Trimble, the cabin owner, does not expect to be among those who would put their place on the market should taxes increase. It is a modest home – about 900 square feet plus a finished basement – and he calculates absorbing a tax increase would be within his family's means. But his vacationing neighbours may not be as willing.
"There will be some people, just on principle, whether they can afford it or not, they'll just sell because they just feel it is not right. And everybody loses."
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