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Addressing condo-hotel tax issue long overdue

Property taxes are due this week, which for most Whistler property owners is not a happy thought. But for some, this may be the last year they have it so good.

Property taxes are due this week, which for most Whistler property owners is not a happy thought. But for some, this may be the last year they have it so good.

Indications are the new provincial government will soon move to address hotel tax disparities, which has been the source of much frustration for some condo-hotel owners and the municipality. They have also been at least partly responsible for the growing number of property managers in Whistler’s condo-hotels, which – among other things – is causing confusion among guests and hurting the resort’s reputation.

To refresh: The current laws allow condo-hotel units to be classified as residential rather than commercial, and pay the lower residential tax rate, if there is more than one property management company in the building and no one company controls 85 per cent of the units. The absurdity of the law became apparent earlier this year when the Westin hotel units were taxed at the residential rate because each parking stall in the basement of the building is considered a unit and the parking stalls are managed by a different company than manages the hotel rooms.

The reclassification of the Westin rooms from commercial to residential meant $600,000 less for the municipality this year. All told, the municipality "lost" nearly $900,000 from the four condo-hotels which this year were classified as residential.

Owners of condo-hotel units argue that they are willing to pay their share of property taxes, they just want the system to be fair and equitable. They say non-stratified hotels have been getting a sweetheart deal because they have been assessed on a revenue basis, which is considerably less than their market value. Condo-hotel units, meanwhile, are bought and sold regularly and so are assessed on their market value.

The issue of multiple property managers in one condo-hotel – Tourism Whistler has counted up to 14 in some buildings – is not due entirely to the tax issue, but nonetheless has become a huge problem for Whistler as a resort. Some people travel thousands of miles to Whistler, make their way up the Sea to Sky Highway, find their hotel and then find they have to go somewhere else to check in. Once in their hotel they may find they can’t get service from the front desk because it is operated by different property management company than looks after their room.

So, the current situation has some condo-hotel unit owners upset, the municipality missing out on revenue, visitors confused, and Tourism Whistler and its members frustrated because some guests are unhappy with their experience in Whistler. Would resolving the tax issue solve everyone’s problems? Probably not, but it would certainly help.

Moreover, this is not just a Whistler problem. Vancouver, Victoria, Sun Peaks and Fernie all have condo-hotels now, and they all have tax issues that need to be resolved.

In Whistler, new condo-hotels being built carry a stipulation that there can be only one property management company in the building, which addresses most of the above concerns. However, existing condo-hotels have no such covenant.

Condo-hotel owners have been raising the tax issue for a number of years but to date the province has only dealt with pieces of the puzzle. In the last couple of years, with the municipality missing out on significant tax revenue, it has become obvious a wholesale review of the situation is needed. It is overdue.

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