A group of Arizona families who own second homes on Vancouver Island say they’re considering legal action if the B.C. government goes ahead with their current plan to introduce a speculation tax on vacant homes.
The province introduced their proposed speculation tax in February, and revised it in March, following complaints from some B.C. municipalities. Its goal is to target foreign investors and prevent them from pushing up urban real estate prices by parking money in a hot market. The tax, in the government’s revision in March, will be applied in Greater Victoria, Metro Vancouver, the Fraser Valley, Nanaimo and the Central Okanagan.
While municipalities like Sidney, Saanich and North Saanich — among others — have asked the province for an exemption from the tax, only the Gulf Islands, the Juan de Fuca region and Parksville/Qualicum Beach have been granted one.
Facing up to $60,000 a year in the new tax, a group of nine property owners from the Phoenix and Scottsdale area of Arizona — each of whom own a home in North Saanich or Sidney — are talking to as many people as they can to try to win an exemption in their community — or have the tax changed significantly, even stopped.
Jolyon Grant, a retired lawyer from Phoenix, says they have been caught up in a tax scheme that is supposed to stop property speculation, but instead appears to punish long-term home owners who happen to live outside of Canada.
“None of us have ever thought of being speculators in the Canadian market,” he said in a phone call from Phoenix. “We are long-term owners. I’ve owned my second home in North Saanich for 21 years.”
While the value of their homes have almost certainly increased over the years, Grant said the people in the group have kept them in their families for years, and many have plans to spend portions of their retirement years on Vancouver Island.
Now, faced with the speculation tax, Grant said some are thinking they may have to sell their homes, as they cannot afford to pay such a tax year after year.
To prevent that, he said they’re spreading the word to whoever will listen and if that doesn’t work, they may try to look for any legal recourse they might have.
That’s a last resort, added Drew Sexton, who is helping co-ordinate the families’ efforts from Arizona. He said the families don’t like being lumped in with land speculators and have enjoyed the ability to keep second homes in B.C. and stay there when they were able to.
Under the proposed tax, homes would have to be occupied (or rented out for at least a month at a time) for six months of the year, in order to be exempt from the tax. If not, non-Canadian home owners would pay 2 per cent of the value of their homes effective 2019.
The tax is set to take effect this year and stays at 0.5 per cent for B.C. residents with second homes in those urban areas. Canadians outside of B.C. will pay the 0.5 per cent in 2018 and then 1 per cent in 2019 and beyond.
Grant said the families feel like the tax is punitive to people whose families have had homes on the Island for decades. Many of them know each other after the Island was “discovered” by people in Phoenix and Scottsdale. He added he doesn’t want to have to rent out his second home, which he said is full of personal belongings and mementos — making it difficult to put it in the hands of strangers.
“We all just fell in love with the place,” he said, adding he’s always enjoyed the welcome they’ve received in Canada by their North Saanich neighbours.
Grant added he’s happy the District of North Saanich has asked the province for an exemption from the tax, but isn’t holding his breath.
As for other options, Grant said a legal challenge might be “down the road” but a “very last resort.”
“We want to avoid that.”