A developer is concerned about the province’s new speculation tax, saying it could be detrimental to tourism in the Sooke Point area.
The speculation tax was introduced to free up vacant properties in urban areas in order to create more housing for B.C. residents. It will mainly affect foreign buyers, who will pay two per cent of their property’s assessed value annually, and out of province buyers, who will pay one per cent of their assessed value.
“Our government wants to make sure people who live and work here are able to find and afford a good home in their community,” said Finance Minister Carole James.
About 99 per cent of B.C. residents will be exempt from the tax, except for those who own multiple properties in major cities and leave them vacant will be asked to contribute at a rate of 0.5 per cent.
Michael Thornton, developer of SookePoint, said the SookePoint cottages and suites are part of a “destination resort complex,” and any non-Canadian who invests in it will be subject to paying the two per cent speculation tax, which would be around $12,000 a year if they own a $600,000 cottage.
Thornton fears this will scare investors off, meaning the resort would turn in to a residential area with private homes.
“SookePoint has the potential to create a $200-million tax base for Sooke, plus create about 300 full and part time tourism-related jobs for residents. In addition, there are years of construction jobs and spin-off benefits to the local community,” said Thornton in a letter to the ministry, asking that SookePoint be exempt from the tax.
He added that SookePoint attracts investments from around the world and would accommodate thousands of short-term guests annually, which contributes significantly to the cost of the land, servicing, construction and generate revenue for amenities in the area.
“They are creating exemptions for rural areas, and SookePoint is as rural as it gets. We don’t even have a bus service and we are being hit with an urban tax,” said Thornton. “We are not Victoria, we are a resort in a remote area, so I hope the government will look at exemptions where exemptions are due. Personally I think all of Sooke should be exempt.”
Rural areas in the CRD that will be excluded from the tax include places like East Sooke, the Gulf Islands and Juan de Fuca.
“We dodged a bullet as far as I’m concerned,” said Juan de Fuca Electoral Area director Mike Hicks. “I’m ecstatic for my constituents, the government has finally recognized us as a rural area.”
He explained that he has been lobbying for years for the Juan de Fuca to be recognized as a rural area instead of being painted with the same brush as more urban areas like Victoria, and attributes this success largely to the support from Premier John Horgan.
“The tax would have been absolutely devastating to somewhere like Port Renfrew, whose economy is pretty much entirely based on tourism and those little vacation cabins they’ve built. Every single one of those cabins is a second home, so the tax would have been crippling. ”
Sooke acting mayor Kevin Pearson said he is also concerned for individuals that will be impacted by the tax.
“Where I see the risk in Sooke is in secondary homes and people planning their retirement here. We have such a favourable climate, and people often come buy a home to secure their future out here but may still need to work a few years in another province, now they are going to be hit with this huge taxation,” said Pearson.
Pearson thinks the government needs to do a bit more groundwork and look at where the tax is most applicable, because small communities like Sooke, where the market isn’t as inflated, are getting pulled into something that is intended for much bigger centres.
“I think a blanket approach for our province is the wrong way. It’s a complex issue, and I don’t think there’s one-size-fits-all solution,” he said.