Author Topic: Why are we subsidizing property taxes of millionaires?  (Read 1409 times)

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Offline eyeball

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Where I live vacation rentals (read, AirbNb) are the big emerging issue. A vacation rental is simply an un-licenced BnB as near as I can tell. But in these characterizing times we live in I guess there will always be a need to make a distinction so as to cast whoever you have your issue with as black sheep.  Local governments have invested in Host-Compliance software that tracks advertising online so as to crack down and get tough (their words) on outlaw landlords. 

From what I can gather the impetus for legalizing unlicensed Vacation Rentals is coming from BnB's that pay a business licence and see this as an issue of fairness.  Other issues include changing the nature of residential neighbourhoods and displacing long-term renters. Fair enough, but what local Village councils are proposing goes much farther than simply licencing or enforcing something they let get out of control.  What they're proposing is that the BC government change the entire province's tax code so that the residential properties that have vacation rentals and or bed and breakfasts can also be taxed as commercial properties.  What they want to do is create a new dual residential/commercial zoning so they can tax some portion of the property at the commercial rate which I believe is twice the residential rate. To do so they will be proposing the BC government get onboard at the next meeting of the Union of BC Municipalities.
It appears the impetus for this is from big resort operators who feel it's unfair that they pay commercial tax rates while everyone else doesn't.  I can't help but get the sense its like comparing a Mom and Pop corner store to Walmart. This aspect of the beef that much bigger corporations and our local politicians have with the little guy should be troubling to anyone that does any sort of home-based business - especially given that the route to making a home-based business a big political and economic issue is to simply complain and suggest government raise everyone's taxes.   Thatís just too easy and sleazy IMO. I guess this is where pointing out that black sheep arenít white helps the cause - lets face it, arranging to have an extra cost imposed on your competition is probably the next best thing to putting money into your own pocket.

Apparently one of the goals of local governments is to encourage or preserve affordable housing through long-term rentals so perhaps they should propose a larger tax grant to residential tenancy property owners as compensation for giving up on the big accommodation bucks and instead provide a valuable social and economic need that many local governments appear to be utterly powerless if not useless at providing.

I'm trying to find a balance between social responsibility and capitalist swinery by providing both. Fortunately I'm in a regional district and not subject to village bylaws.
« Last Edit: February 26, 2017, 08:38:32 pm by eyeball »
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Offline msj

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Good post eyeball.

I will also point out that there could be GST issues here too (converting residential property to commercial property and, presumably, back to residential at some point) and income taxes. 

In 2016 we have to declare any sale or change in use of our principal residence which people will begin to see how this impacts their PR exemption claims in the future (i.e. people have been getting away with tax free capital gains on more than one property due to sloppiness on the governments' part).

So the governments are starting to catch up and cash in on the real estate craze - about stinking time.

I've gotta have more cow bell! -Bruce Dickinson

Offline eyeball

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Another question I'd like answered is why we're encouraging more millionaires to buy property in BC.  Seems like a dumb question on the face of it I know but I really think we should be careful about what we wish for.

I mentioned to a couple of guests of mine how the effect of a hot real-estate market in Vancouver is spilling over hereabouts in the form of people cashing in on the big bucks, buying a really nice place here with a third of their gains and retiring on the rest.  They seemed surprised and told me they were exactly what I was talking about and were in the area shopping around.

The problem I have with the money coming into BC is not where the people bringing it are from but the values and principles they used and abused to earn it.  I suspect much of the wealth buying its way here was created on the backs of exploited workers and at the expense of the environment these workers and their families live in and will likely die in.  Instead of staying at home and using these millions and billions to bring their own countries up to a better standard its coming here where it's clean, green and much safer and nicer.

If we were really serious about screening people for their values out of a concern for preserving our's we'd probably only have to look at their wealth to get the gist of where it and the people it belongs to are really coming from.  When I think about how wealth and power here appear to be working together to make it tougher for little people to stay and make a buck I can't help but get the sense its to force them out to make room for those who've already got it made - like addressing this issue by making it harder for local first time buyers for example or to squeeze people in the manner I mentioned in my previous post.

I think maybe a lot of those values and principles I mentioned are already well established here. Perhaps we should change the name of BC to Elysium.
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