Fear tax increase under proposed licensing system
Owners of property zoned for tourist accommodation remain skeptical – if not outright hostile – toward the municipality’s plan to address the issue of "illegal" nightly rentals through a licensing system.
Approximately 120 people gathered at Myrtle Philip school Oct. 5 to discuss the municipality’s proposed business regulation and business licence bylaws, but before the meeting could event get underway Lorraine Bennett of the Whistler Homeowners Group raised a point of order.
Bennett, and others over the course of a two and a half hour meeting, challenged a statement on the municipality’s Web site which said the proposed licensing system would not affect property assessments.
Bennett said her group had received a legal opinion the previous night that if the municipality requires legally zoned TA properties to acquire a business licence, as proposed, the B.C. Assessment Authority may reclassify those properties from class 1 (residential) to class 6 (commercial). That would mean taxes on those properties would triple.
Bill Barratt, general manager of community services, admitted that the municipality has no control over provincial matters but maintained that business licences are issued to companies operating out of residential addresses now, and the B.C. Assessment Authority hasn’t questioned the classification of those properties. He also noted that bed and breakfasts and pensions are classified as class 1 properties.
However Barratt did not convince many.
"Once we accept a business licence we don’t have a leg to stand on," said Susie Goodall, who owns a TA-zoned property.
"This is a statement the municipality is in no position to make," Rick Bennett said of assertion on the municipal Web site.
Patrick McCurdy of Whistler Chalets and Accommodations suggested the provincial government has its eye on Whistler for additional revenue. McCurdy said his company was undergoing a tax audit and his auditor indicated that any business collecting provincial sales tax and GST was considered a commercial property.
"I’m quite confident.. there’s a desire to make nightly rentals commercial properties. California is already there," McCurdy said.
It was also pointed out that if the province considers TA-zoned and licensed houses commercial properties Revenue Canada would likely do so as well. That would mean the end to any capital gains exemptions when those houses are sold.
Barratt, in reviewing the background behind the municipality’s bylaw proposal, said the objective was to eliminate illegal rentals, protect TA-zoned properties from illegal competition, preserve residential neighbourhoods and ensure a range of accommodation options exist in Whistler.
The licensing scheme was proposed because while the existing zoning bylaws regulate property use, they don’t regulate marketing of properties. Currently the municipality must collect evidence that non-TA-zoned properties are being marketed for nightly rentals in order to get a court injunction against those "illegal" property owners.
By requiring each TA-zoned property to have a licence, the municipality could act much more quickly and efficiently when it receives a complaint, Barratt said.
"The bylaws are there to support legal TA properties," Barratt said. "This is all done on the assumption you want us to enforce against illegal rentals."
Rick Bennett replied that a reasonable effort to enforce the zoning was supported, "but don’t kill the patient with the cure."
Bennett, a lawyer, also argued that the evidence the municipality needs to gather to get an injunction against an illegal property rental was the same whether a business licence was issued or not.
Barratt replied that according to the legal advice the municipality has received it was not; that the proposed licence system would simplify the process.
Others asked if some sort of certificate – rather than a business licence – could be issued to the owner of each TA property to avoid the attention of the B.C. Assessment Authority.
Barratt said following the meeting that the municipality would look into the tax issue again and would keep people appraised of the issue through the municipal Web site.
