After the province announced a new speculation tax in this year’s budget, Central Saanich council received letters from the Greater Victoria Real Estate Board and the Victoria Residential Builders Association, and both groups were critical of the new tax.
Over two council meetings, the regular council meeting on April 3 and the Committee of the Whole on April 9, councillors discussed the issue, but not for very long.
The province’s speculation tax is for non-primary homes occupied less than six months out of the year in certain hot real estate markets like Greater Victoria (minus the Gulf Islands) and Metro Vancouver (excluding Bowen Island).
It is set at 2 per cent for non-Canadian buyers, 1 per cent for Canadians from outside B.C., and 0.5 per cent for B.C. residents. B.C. residents will also get a tax credit that effectively eliminates the tax on a second home valued up to $400,000 (tax is payable on every dollar beyond that).
In a letter from the Greater Victoria Real Estate Board, president Kyle Kerr asked if the mayor could write the province and ask them to halt the speculation tax as defined. The GVREB believes that while the Gulf Islands exemptions announced March 26 were good, the tax is still a “threat to our local economy” and that “attempts to devalue the housing market in our area are dangerous and will further undermine economic confidence in a market that has already begun to slow down.”
A letter from the Victoria Residential Builders Association called the speculation tax a “poorly developed tax policy that does not accomplish their goals.” In the letter, president Casey Edge said it created uncertainty for out-of-province Canadians and B.C. residents with vacation homes. “By simply proposing this tax, homebuilding projects in the CRD are being cancelled.” As with the GVREB letter, the VRBA wants Central Saanich to ask for an exemption from the tax.
Coun. Niall Paltiel made a motion to support a request for exemption to the province, which was seconded by Coun. Carl Jensen.
In discussion, Coun. Zeb King said he wanted to see other reasons and perspectives on the tax. He wanted to send it to a committee meeting with more information to answer some questions, “but as it stands, we’re only hearing from one side of equation, I think.”
Coun. Alicia Holman said she didn’t understand the reasons why Central Saanich should be exempt.
“If there’s a pressing need to exclude, I’d like to understand what that is,” she said.
Jensen said in light of the Gulf Islands exemption announced March 26, he said it was worth a try.
“I don’t see the harm in throwing Central Saanich in the ring,” he said.
King reiterated that a letter in favour of the speculation tax was not received by council, and so that side was not being represented. He added, “I just wanted to make the perhaps obvious point that, would [the tax] be a benefit to residents? Because in fact, there are homeowners, but there are also renters, and they are all residents of Central Saanich.”
At this point, Paltiel referred this to the following week’s Committee of the Whole meeting for further debate and discussion, which passed. When the subject came up the following week, three hours into their meeting, the mayor asked to postpone this item indefinitely. He leaned back in his chair, and Holman looked up from her notes.
King asked, “How do we handle that?” As chair, Jensen asked Windsor to explain his intent.
Windsor said that in Robert’s Rules of Order, items could be set aside and if no one chooses to bring it back, it does not return.
“Good idea,” said Holman.
The motion to set it aside passed with Paltiel and Jensen in opposition.