The goal of a vacancy tax would be to encourage condo buildings to be used as primary residences, and penalize absentee owners who do not live in or rent out their units long-term. The City of Victoria argued that the declaration tax could present a good opportunity for condo-run businesses to be moved outside of the residential property tax bracket. (File photo)

The goal of a vacancy tax would be to encourage condo buildings to be used as primary residences, and penalize absentee owners who do not live in or rent out their units long-term. The City of Victoria argued that the declaration tax could present a good opportunity for condo-run businesses to be moved outside of the residential property tax bracket. (File photo)

Victoria and the province disagree on proposed condo Airbnb tax

Council seeks a meeting with the minister after receiving a dissenting letter

Victoria City Council is requesting a meeting with Minister of Municipal Affairs and Housing, Selina Robinson, following a disagreement on the province’s property tax assessment of condos running short-term rental units.

In November 2018, council sent the ministry a letter asking the province to have a split classification system in tandem with its new speculation and vacancy tax declaration for properties running as short-term rental units through applications like Airbnb.

If approved, this kind of assessment change could potentially triple the property taxes on these units.

However, the ministry disagreed with this proposition, citing the difficulty it would take to roll out a split system.

“[T]he City’s proposal would have substantial assessment policy, legislative and tax implications on a provincial basis,” Robinson wrote in her response letter, dated Feb. 12, 2019. “In addition, implementing such a proposal would be very costly, and it would be time consuming for BC Assessment (BCA) to identify the units to which this policy would apply.”

READ MORE: City of Victoria to start charging illegal short-term rental operators

Robinson further stated that as of Nov. 30, 2018, the province granted stratas the right to fine residents up to $1,000 per day for not complying with a strata bylaw limiting or banning short-term rentals.

In a committee of the whole meeting on Thursday, Coun. Ben Isitt motioned to have Mayor Lisa Helps write to Robinson to request a meeting to discuss the different viewpoints on the assessment of commercial short-term rental units.

Coun. Geoff Young, who was a strong advocate of sending the initial letter, noted that more clarification was needed in the disagreement.

ALSO READ: B.C. cities want mandated business licences for short-term rentals

“The ministry’s letter refers to various legal and technical concerns that they have, but she didn’t elaborate on them in detail,” Young said. “This is a file that’s best carried forward by a conversation in order to illicit from her the views of what are the complexities that she sees or her staff sees.”

Isitt further said that not amending this taxation would further spur the housing crisis.

“Ultimately if a condo unit goes from its current discounted value as if it were someone’s home, say at $2,500… to $8,000 per year, that’s a very strong market signal to move that unit back into the housing supply, or to have the operator of that unit price the unit to reflect that taxation,” Isitt said.

Isitt further noted that the current “tax loophole” was giving some people a very unfair advantage in a competitive housing market.

Council voted unanimously to forward the letter to the ministry.

nicole.crescenzi@vicnews.com


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