With housing costs going through the roof in the Cowichan Valley, particularly in the Lake Cowichan area, the Cowichan Valley Regional District is considering taking part in the province’s speculation tax regime.
At the district’s committee of the whole meeting on Jan. 12, directors voted to introduce a resolution to the upcoming 2022 Association of Vancouver Island and Coastal Communities convention asking that the province consult with local governments on an evaluation of the speculation and vacancy tax, including a review of the jurisdictions in B.C. that have the tax in place and the impacts on areas adjacent to them that don’t.
The speculation and vacancy tax is a tax paid by some owners of residential properties in a number of areas of the province, including the City of Nanaimo and the Capital Regional District that border the CVRD, that is designed to discourage housing speculation and people from leaving homes vacant.
Currently, the speculation tax is restricted to urban areas.
Ian Morrison, director for Cowichan Lake South/Skutz Falls, said the impacts of not having the speculation tax in place in the CVRD is detrimental to his electoral area, particularly in recreational and waterfront locations.
Waterfront properties in Honeymoon Bay and Mesachie Lake, which are in Morrison’s electoral area, saw a dramatic 64 per cent increase in value, from $881,000 to $1,410,000, since last year, according the latest figures by BC Assessment released earlier this month.
“What we are seeing happening now is a flight of money into our area because neighbouring jurisdictions have the [speculation tax], so there’s money, but not the people, coming in and investing in recreational properties in my area,” Morrison said.
“This is resulting in a slow, but steady hollowing out of how our communities are. We have people that are buying properties that are maybe spending two weeks of the summer here and are absent the rest of the time. This is driving up prices unrealistically. People are now complaining that they can’t afford to live and work here in what has historically been the least expensive place to live in the Cowichan Valley.”
Tim McGonigle, director for the Town of Lake Cowichan, said, at 43 per cent, the town had one of the highest increases in housing evaluations from BC Assessment in the CVRD.
An average single-family home in Lake Cowichan has jumped from $367,000 to $521,000 since last year.
“This is the result of an influx of outside money coming in to purchase properties, whether for Airbnb or recreational activities, and it’s impacting the whole west end on affordability,” McGonigle said.
“So what was affordable is not so now. I support this resolution. When we’re wedged between two entities that have the speculation tax, where would you have your money put? In one that doesn’t have the speculation tax and that’s where we reside.”