The province’s new speculation and vacancy tax declaration could provide a pathway to taxing condos being used as Airbnbs as commercial operations, says Victoria Coun. Geoff Young.
But it doesn’t appear the province is prepared to go down that road.
Frustrated at the prospect of hundreds of city condos being assessed as residential units even though they are rented out as de facto hotels rooms through online platforms such as Airbnb, the city wrote to the province to ask for a change through the B.C. Assessment Authority.
If approved, such an assessment change would triple the property taxes on those units.
But in response to Victoria’s request, Housing Minister Selina Robinson said the issue of short-term rentals is “complex” and amending the Assessment Act “would have substantial assessment policy, legislative and tax implications.”
“In addition, implementing such a proposal would be very costly and it would be time-consuming for B.C. Assessment to identify the units to which this policy would apply,” Robinson said in a letter to Victoria Mayor Lisa Helps.
Young, who had pushed for the property-assessment change, said he doesn’t agree.
“I think [Robinson’s response] probably reflects the position of the Assessment Authority.”
Although the change would require some additional effort, that would be small compared with the benefits, Young said — including the possibility that some units currently used as vacation rentals would return to the long-term-rental market.
Most homeowners in areas affected by B.C.’s speculation and vacancy tax will have received a letter from the provincial government advising how to make a declaration by March 31 to avoid being hit by the tax.
Young said it would be a small step to ask through that declaration process whether a property is being used as a short-term vacation rental.
“For them to say that it’s too much trouble to take the additional step for determining that if the property is used as short-term vacation rental it appropriately pays the same tax as a hotel, seems to be an inconsistent position,” Young said.
“It seems to me that once you’ve gone down this road of: ‘We want to know how you use your property and whether you’re living in it,’ you might as well follow that logic and ask your assessment authority to take whatever steps are necessary to ensure that they know how a property is being used.”
Young said the city permits situations where one or two bedrooms in an owner’s principal residence are used as short-term rentals.
“Also, we’re not fanatics. If you go away for six weeks in the summer from your permanent residence and you’re travelling, we don’t want to say you can’t rent out your house. So we would always allow some use of residential property,” he said.
Under the provincial tax, owners with non-primary residences who keep those homes empty more than six months of the year are subject to the tax, equal to 0.5 per cent of the assessed value, per year. Overseas owners who are liable for the tax will be charged two per cent of the assessed value. There are many exemptions, including one for properties occupied by renters.