Saying it’s a job killer, Langford is adding its voice to those calling on the province to rethink its planned property speculation tax.
Langford councillors have unanimously agreed to write the province asking for an exemption from the tax and will seek support from the Capital Regional District in an appeal to the province to allow municipalities to opt in or out of the tax.
“I’m worried about jobs more than anything else,” said Langford Mayor Stew Young. “This is a direct job killer.”
“I want jobs in Langford. I don’t want to begin on a speculation tax that kills jobs. Because when house prices go down, they don’t build as many homes,” Young said, noting 60 per cent of people who work in Langford are homeowners “because they have actual jobs now in the trades industry — good jobs.”
The speculation tax, intended to improve housing affordability, is aimed at people who own multiple properties and leave them vacant. Homeowners can avoid the tax by renting their property for at least six months in a year.
The legislation, coming this fall, would place a two per cent tax on a property’s assessed value for foreign investors, one per cent for Canadian citizens living outside B.C. and 0.5 per cent for British Columbians who are Canadian citizens or permanent residents.
It applies to properties in the capital region, with the exception of the Gulf Islands and the Juan de Fuca electoral area. It also applies to Nanaimo-Lantzville, Metro Vancouver, Kelowna, West Kelowna, Abbotsford, Chilliwack and Mission.
A Langford staff report notes that the tax will negatively affect long-term owners who are not speculating in the housing market but rather buy a property with the intention of moving into it when they retire.
“If you’re flipping a house or a condo within a short period of purchase, you’ll only be liable for the new tax within that short period. Whereas long-term, non-resident owners who are not speculating on the housing market — they simply own the home — will have to pay that same tax year after year,” the report says.
Renting out the property might not always be feasible as many owners might want to use it at various times during the year.
Langford has made housing affordability a priority by reducing bureaucratic barriers through innovative zoning regulations and a fast-tracked permitting system, the staff report says.
“The implementation of this tax will negatively impact the City of Langford’s economy, revenue and tax income and work against continued efforts to develop more affordable housing market,” the staff report says.
Langford’s and Sooke’s housing prices are far more affordable than they are in Victoria or Saanich, Young said.
“If the government says this regional district is included, that’s wrong. It should be each municipality listed and each municipality should have the ability to opt out,” Young said.
Young said he has already hearing of Albertans pulling out of deals to buy houses.
“The government has to be very careful because they’ve got such a sour taste in Albertans’ mouths right now who think that B.C. doesn’t want us. You’ve got the oil dispute. You’ve got the wine dispute,” he said.
Sidney town council last month voted to ask the province to take a second look at the speculation tax, warning that many long-time homeowners who contribute to the community are already planning to sell their properties because of it.
Parksville and Qualicum Beach had initially been included in the areas covered by the tax but were subsequently dropped.
British Columbians with vacant second homes will be eligible for a tax credit of $2,000 applied against the speculation tax. The tax credit ensures that British Columbians do not pay taxes on a second home valued up to $400,000, the province said.
