B.C. government hints at changes to speculation tax so it doesn't impact locals with vacation homes

B.C. Finance Minister Carole James gave hints on Wednesday the government would be generous with exemptions to local residents that have vacation homes that could be impacted by the new speculation tax.

"We're working on those details now, including all of the issues people have been raising," said James, who said some details of exemptions to the tax which will be assessed at two per cent of a vacant property's value beginning in 2019 would be released this spring, months earlier than they had originally communicated.

"We're aiming to make sure we get speculators out of the market," she said.

When it was pointed out that the proposed tax, as outlined, would financially penalize some locals with vacation homes held for decades, James said "that's not our aim. It's to make sure we get speculators out of the market."

Tax credit for affected locals

When James announced the taxlast month, the government said it wouldapply to British Columbiansand non-British Columbians alike who owned residential propertythat either wasn't rented outor wasn't their principal residence, in the following areas:

• Metro Vancouver including Bowen Island andthe Fraser Valley Regional District.
• Capital Regional District (includngthe lower Gulf Islands).
• Nanaimo Regional District (including Parksville, Qualicum Beach and Gabriola Island).
• Municipalities of Kelowna and West Kelowna.

The government has said a non-refundable income tax credit will help offset the tax for B.C. residents.

Buthow much that credit would be is a big question in communities where large parts of the population are part-time residents who could face anew annual tax in the tens of thousands.

"When we proposed a speculation tax, we were not thinking of it as hitting a retired couple who have a longtime vacation home on a Gulf Island. That was not the intention of this tax, and that is what we're starting to hear," said Green Party MLA Adam Olsen, who represents Saanich North and the Islands.

He acknowledgesfinding a solution is tricky, because every community has its own challenges.

"If you take a look at Salt Spring, it has a larger population, and there'sa massive housing challenge there. Nurses and service workers and even doctors can't find a place to live. Whereas Mayne Island and Pender, there's smaller populations that really explodein the summer."

Details to come

B.C. Liberal MLA Michelle Stilwell, who represents Parksville-Qualicum, is also hoping details come quickly.

"People who live there part-time for half the year, they're part of the community. They volunteer in the community.They take part in events.They spend money," she said of her community, which has the oldest median age in the province.

"For themto have this increased tax ...for seniors on fixed incomes, they can't afford it, and now they're having to talk about selling their family homeor put away their retirement dream and put it on the backburner. How is that fair?"

• Kelownamayor says B.C.'s speculation tax could have 'dire unintended consequences'
• Own property in B.C.? You could be on the hook for a massive tax hike next year

At the same time, Stilwell is concerned that if the government increases the number of exemptions, they won'tbe able to meet their budgeted goal of $200 million annually from the speculation tax.

"How is this going to end up in their bottom line?That revenue they were expecting to get from this speculation tax ... is there going ot be a different tax coming to taxpayers in another way?"

For her part, James is urging the public to be patient, saying the reason they announced the tax months in advance is so they can fine tune the details.

"We're taking the time to make sure we do the implementation well," said James.

"You'll see the response and you'll see the specifics."