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By Liam Verster /Vernon Matters

SPEC TAX

Speculation tax could affect 6,000 Vernon properties

Dec 9, 2023 | 9:12 AM

VERNON — An early estimate by City of Vernon staff suggests the Speculation and Vacancy Tax could affect upwards of 6,000 residential properties in Vernon.

On Nov. 22, 2023 the province announced that Vernon, Coldstream, and several other municipalities in B.C. would be included in the tax’s expansion.

This program, that will take effect locally in 2025, sees property owners who do not use their homes as primary residences, rent them out for at least six months a year, or leave them uninhabited potentially issued a monetary penalty. Foreign owners are taxed two per cent of the property’s assessed value, and owners who are Canadian citizens or permanent residents are taxed 0.5 per cent.

A staff report to Vernon city council stated that 68 per cent of the 18,849 residential properties in Vernon claimed the home owner grant in the 2023 tax year, indicating 12,817 of the properties in the city are being used as a primary residence and would be exempt from the tax.

That leaves an estimated 32 per cent, or 6,031 residential properties, where a home owner grant was not claimed and could potentially fall under the Speculation and Vacancy Tax.

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There are a number of exemptions, including

• for properties with an assessed value under $150,000;
• properties that are owned by a registered charity, co-operative, municipality or other government entity;
• properties that are rented for at least six months of the year;
• properties under construction or renovation that cannot be occupied for at least a 90 day period;
• newly constructed properties that remain under the ownership of the developer and are unoccupied but offered for sale in the calendar year;
• and strata properties that are operated like a hotel for most of the year with the annual usage reported to B.C. Assessment.

The report from John Perrott, the city’s economic development and tourism manager, stated the Outback Resort, the Strand Lakeside Resort, and parts of Predator Ridge Resort would likely be exempt from the tax under the strata qualification.

It remained unclear if developments within the tourist zones that are individually-owned and operated, and marketed using online platforms like AirBNB would qualify for an exemption.

The report showed there were 139 such properties within the City of Vernon boundary. Those involve 27 tourist commercial, 37 tourist commercial and residential, 62 resort commercial and 13 resort commercial and residential.

It was also not clear if any of the 6,031 residential properties where a homeowner grant was not claimed would qualify for exemptions by being rented out, below the assessment threshold, or are unoccupied due to being under construction or owned by a developer.

The report will be presented to Vernon council for information at the regular meeting Monday, Dec. 11.