BC’s “speculation tax” does not apply to Fernie, the tax will target foreign and domestic speculators in other areas of BC. Fernie has a high percentage of out-of-province buyers, sitting in the middle of the Out-of-province home purchases in B.C.’s Kootenay region.
The BC government announced in it’s 2018 budget that it would be introducing legislation to impose an annual speculation tax. The tax will be effective for the 2018 tax year. The speculation tax will target foreign and domestic speculators in BC. The tax will not apply to Fernie and the Kootenay region as a whole.
The Fernie Real Estate property shown above is listed for 2.5 million.
“This tax will target foreign and domestic speculators who own residential property in B.C., but don’t pay taxes here, including those who leave their units sitting vacant,” materials released with the budget said.
The tax won’t apply to “most principal residences, qualifying long-term rental properties and special cases,” the government said. “The province will also introduce a non-refundable income tax credit which will allow those who pay income tax in B.C. to offset the property tax.” Revenue Canada defines a “principal residence” as one that the owners occupy for at least part of the year and designate as their main residence.
The tax is a bold measure, Finance Minister Carole James said. “We want to get speculation out of the market. We know it’s a problem in our housing market. We know we have to address it. We know British Columbians expect us to address it. It was ignored by the previous government. We’re acting on it.”
“We’re taking time to make sure we get the implementation right,” she said. “We are looking at all the specifics. As I’ve said the speculation tax is to get speculators who are using our housing market as a stock market out of the business. We are not aiming at British Columbians who have cabins, and details around all of that will come.”
The speculation tax will initially apply to the Metro Vancouver, Fraser Valley, Capital and Nanaimo Regional Districts, and in the municipalities of Kelowna and West Kelowna. In 2018, the tax rate will be $5 per $1,000 of assessed value. In 2019, the rate will increase to $20 per $1,000 of assessed value.
According to an article in the Globe and Mail newspaper the Kootenay region is heavily dependent on Alberta home buyers. The article, which called the region “Alberta’s Playground” cites the following statistics showing the percentage of out-of-province buyers.
Though not applicable to Fernie or the Kootenays, the B.C. Government stated, “The majority of BC homeowners will be exempt from this tax. The speculation tax will target foreign and domestic speculators in BC. These are homeowners who have removed their units from BC’s long-term housing stock – meaning they are not owner-occupied or a qualifying long-term rental property.”
Source: Kootenay Business