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Condo, hotel tax proposal doesn’t fly

Proposed commercial-residential conundrumsolution "disincentive to rent"

By Alison Taylor

The resort municipality is not keen on a proposed solution to the ongoing property tax discrepancies plaguing condo/hotels in Whistler and other resort towns.

The new proposal, drawn up by representatives of the B.C. & Yukon Hotels’ Association, was an attempt to find resolution to the Class 1/Class 6 tax rate inconsistencies. Essentially their solution called for condo/hotel units to be taxed at the higher commercial tax rate based on the revenues from renting the property, but it would only trigger on properties rented 50 per cent of the time. When not rented the condos would be taxed at the much lower residential rate.

“It almost creates a disincentive for people to rent,” said Mayor Ken Melamed.

“We want people to be active about getting their products on the market. We want more availability, not less.”

The solution, called the Split Class 50, was presented to the B.C. Resort Communities Collaborative in Victoria last Monday but was not endorsed.

The 13 members of the collaborative, of which Whistler is a key member, asked for more time to review the proposal and understand it before making a decision, according to Melamed who was at the meeting.

Whistler was given a sneak preview of the proposal before that meeting.

“Our initial reaction was that it was problematic and that it would create a very unfair tax loss for us, which could potentially result in an increased tax across the board for Whistler,” said Melamed.

The municipality estimates the solution presented by the B.C. & Yukon Hotels’ Association could result in lost revenues of $3 million annually to the municipal budget.

The issue, which was once unique to Whistler and has since spread across the province, revolves around condos which are zoned for tourist accommodation.

If there is more than one property management company looking after units in a strata-titled property, controlling at least 15 per cent of the units, condo owners can be taxed at the residential rate rather than the commercial rate. The difference between the two tax rates is significant.

In 2005 the commercial tax rate (or Class 6) was more than three and a half times higher than the residential tax rate (or Class 1).

The Resort Collaborative last winter proposed a resolution that would see the creation of a separate tax rate to be set by individual municipalities. That proposal hasn’t been accepted by the province.

Representatives of the B.C. & Yukon Hotels’ Association did not return phone calls before press time Wednesday.