Oak Bay council weighs in on speculation tax

A motion that would ask the government to stop the implementation of the speculation tax until municipalities were properly consulted was voted down last night at Oak Bay council.

The proposed speculation tax is designed to punish those property owners who leave units vacant and, according to B.C. Finance Minster Carole James, “parking their capital on our housing market simply to speculate, driving up prices and removing rental stock.”

The tax requires B.C. residents to pay a tax of 0.5 per cent on second or vacation homes valued at $400,000 or above if their owners do not rent them out for at least six months of the year, for periods of at least 30 days. Homes under $400,000 will be exempt in order to ensure that most cabins are not caught in the tax, according to Finance Minister Carole James.

But there are concerns about what the tax will mean to the community of Oak Bay that has many residents maintaining one home here and another away, only spending a portion of the year in the community, or those that are transitioning into retirement and a move to the coast but not living here full-time yet.

Coun. Kevin Murdoch, who presented the motion last night, wants municipalities to have input on the proposed tax. The tax is provincial jurisdiction though, so while it impacts the community, council can only advocate for changes, they do not have the power to implement them.

Murdoch’s motion, citing the fact that “the uncertainty, scale, and inconsistent application of the tax is causing significant and reasonable concern among homeowners”, asked that the Mayor draft a letter to Premier John Horgan, Minister of Finance Carole James, Minister of Municipal Affairs and Housing Selina Robinson, and Oak Bay - Gordon Head MLA Andrew Weaver requesting that implementation of the speculation tax be suspended until there is more clarity and consultation with the municipalities. If a more thorough review of the tax and surrounding policies are not forthcoming, the motion asks that Oak Bay be excluded from the Speculation Tax until the review is done.

After a wide-ranging debate around the council table and different concerns expressed from every councillor, there was no consensus on the issue. The motion was voted down in a 5-2 vote with just Murdoch and Coun. Hazel Braithwaite in support.

“I brought the motion because I felt leveraging the expertise of municipalities would reduce the chance of unintended negative consequences. Municipalities, through Union of British Columbia Municipalities (UBCM), are uniquely positioned to provide evidence-based policy guidance on housing-related tax policies. I of course disagree with the decision, but respect the will of council on the matter,” said Murdoch.

Hearing that council would be discussing the “opting out” letter, the Victoria Golf Club submitted comment to the municipality.

“As a golf club you may be aware that we have attracted many Alberta and Ontario families with long term plans of retiring in Victoria. Many travel to Victoria regularly and in fact many have a spouse that lives here full time and they commute back and forth. All told we believe we have over 200 members that will be affected by the tax, many of which live in Oak Bay,” said Scott Kolb, general manager at Victoria Golf Club. “For these individuals, they are deeply offended that they are considered “speculators”. They are homeowners who have invested in property in Victoria and our community. They pay property taxes, pay for upkeep of their homes, and contribute to our local businesses. They also invest in our arts and strong community involvement with supporting local charities. I hope on May 14 you and your council will represent the homeowners of Oak Bay and ask for the provincial government to opt out of this unfair tax.”

While the motion didn’t pass, Mayor Nils Jensen said they all agreed that they don’t want a community with a lot of empty homes as it undermines the quality of life. Jensen points out that the CRD is proposing a motion to UBCM in September which urges the Province of British Columbia to allow municipalities to opt out of the new housing speculation tax.