On Monday morning, frustrated Bowen Islanders spoke out against a proposed speculation tax at council.
“People were apoplectic,” said mayor Murray Skeels, speaking with the Bowen Island Undercurrent, of the intense feedback he received, relating to the tax.
“Just the impact was going to be so profound, so devastating,” he said, adding council received dozens of letters from concerned people.
And he said, the response from islanders was “pretty straightforward,” adding: “It was just: do the math.”
Then on Monday afternoon — hours after the municipal meeting — finance minister Carole James announced changes to the proposed speculation tax.
For starters, B.C. residents will now only have to pay 0.5 per cent a year on second homes valued at $400,000 or above, she announced.
And the tax will apply to B.C. residents who own any second or vacation home that is not rented out at least six months of the year, for periods of at least 30 days. Also, homes under $400,000 will be exempt, in order to ensure that most cabins are not caught in the tax, said James.
James also told media that the catchment boundaries of where the tax will apply were reduced. So while areas like Metro Vancouver, Kelowna and Nanaimo are included, rural and island areas were excluded from the tax.
But what about Bowen?
From 2:30 to 3:30 p.m. or so on Monday, Skeels said they weren’t completely certain, as initially Bowen Island wasn’t specifically mentioned.
Calls were made. Emails were sent.
Then at 4:15 p.m., he said, Kathy Lalonde, chief administrative officer for the municipality, received word in writing: Bowen Island was exempt.
“I’m pretty happy,” said Skeels on Tuesday. “Given the range of possibilities, I think we did pretty well with it.”,
But, he added, islanders who live on Bowen full time but maintain a residence in places like Vancouver will be impacted by the tax.
And, he said, the whole thing was quite frustrating.
"It should have never happened in the first place," said Skeels.
More details revealed
The minister said that under these new changes, 99 per cent of British Columbians will not have to pay the speculation tax.
Canadians from outside the province will have to pay 0.5 per cent this year and a reduced one per cent thereafter. Non-Canadian residents will still have to pay 0.5 per cent this year and 2 per cent thereafter, as under the previous iteration of the tax.
B.C. income-tax payers who are paying the 0.5 per cent annual tax will still be eligible for a credit to offset their speculation tax bill.
The minister added that, just as with Vancouver’s Empty Homes Tax, there would be exemptions for special cases, such as homes owned by seniors going into long-term care or homes under probate, for example.
James said that the ministry was working on a system to “temporarily” grandfather in exemptions on strata homes in buildings that do not allow rentals. However, she added that this could not be a permanent exemption as it could potentially incentivize strata corporations to exclude rentals or encourage speculators to invest in such buildings where the tax does not apply.
When asked whether the reduction in the scope of the tax would affect the projected $200 million in revenues, James said that this original figure had been “conservative” and she didn’t expect the changes to make a difference in revenues.
“We have focused the geographic areas so this tax only applies in urban housing markets hit hardest by the housing crisis,” said James. “With so many people desperate to find good homes in these urban areas, we need to take every step we can to free up and create more housing opportunities.”