Conflicts of Interest – BC MLAs Heavily Invested In RE Making Laws About RE

Premier John Horgan and Finance Minister Carole James say the government is still working out the details of a new speculation tax on B.C. properties.

It’s a discussion their colleagues in the legislature will be keenly interested in, as many of them own two or more homes in the province.

Horgan said the government has delivered on its promise to put in place a speculation tax. But the announcement has sparked concern from owners of vacation homes who fear a hefty tax bill.

“We haven’t laid out the details,” Horgan said. “Now we’re making sure the minister of finance, with the assistance of British Columbians, will be able to fine tune that so we realize the objectives of the tax and also go forward in a way that makes sense to people.”

The February budget included a speculation tax that will be effective for the 2018 tax year. The government said the tax would initially apply in Metro Vancouver, the Fraser Valley, the Capital and Nanaimo Regional Districts, and the municipalities of Kelowna and West Kelowna.

The tax was to target properties owned by people who don’t pay income tax in the province. It will be $5 per $1,000 of assessed value this year and in 2019 will rise to $20 per $1,000 assessed value.

That means that someone with a $1-million property covered by the tax would be looking at a $5,000 tax bill for 2018 and $20,000 in 2019.

“This tax will target foreign and domestic speculators who own residential property in B.C., but don’t pay taxes here, including those who leave their units sitting vacant,” materials released with the budget said.

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The tax is a bold measure, [Carole James] said. “We want to get speculation out of the market. We know it’s a problem in our housing market. We know we have to address it. We know British Columbians expect us to address it. It was ignored by the previous government. We’re acting on it.”

That action could affect dozens of the province’s 87 MLAs and their families based on their public financial disclosure statements. The statements also give a window into how complicated many people’s real estate dealings are.

Horgan, for example, has a one-third interest in an investment property in Victoria. As long as it’s rented for the long-term he’ll be exempt from the speculation tax, but not if it’s sitting empty.

James owns not just the home she lives in, but she is also the joint owner with a family member of a second home in Victoria. Presumably that home is her relative’s principal residence, which would make it exempt.

But what about out-of-town MLAs who use the allowances — from $12,000 to $19,000 a year — provided for housing in the capital to help buy second homes? On the NDP side they include Bruce Ralston, Selina Robinson, Ravi Kahlon and Rachna Singh.

Shane Simpson and Scott Fraser each disclose owning a half share in a Victoria home and principal residences elsewhere. Fraser also owns an investment property in Parksville. Leonard Krog has an investment property in Victoria and a recreational property at Black Creek.

Claire Trevena owns a second home in Victoria and an investment property on Quadra Island. Spencer Chandra Herbert owns a second home in Victoria, but also has an investment property in Vancouver and a 50-per-cent interest in a recreational property in West Vancouver.

Michelle Mungall owns a second home in Victoria, two investment properties in Nelson and a third in Castlegar. All three investment properties are outside the regions where the new tax is to apply.

David Eby, by the way, owns a home in Victoria, but not in Vancouver where the constituency he represents is.

On the Liberal side, MLAs owning a second home in Victoria include Marvin Hunt, John Yap, Mike Bernier, Ralph Sultan and Jordan Sturdy.

“There’s no consideration around ‘special’ for one group or another,” James said when asked how the new tax may affect MLAs with second homes in Victoria. “We’re going to look at all of the questions and issues that have come forward and we’re going to make the decisions and bring the implementation forward.”

Among the Greens, Andrew Weaver owns a recreational property in Parksville and two investment properties in Victoria. Sonia Furstenau’s spouse has an investment property in Victoria.

Several MLAs also have recreational properties. Cabinet minister Judy Darcy has a recreational property on Mayne Island, which is included in the areas where the tax will apply. NDP MLA Janet Routledge owns a recreational property on Mayne Island and a timeshare in Whistler.

Peter Milobar shares with family members a cabin on Shuswap Lake. Greg Kyllo and spouse have a 50-per-cent interest in a recreational property at Silver Star in Vernon.

Others hold investment properties that are likely rented out. Bob D’Eith’s spouse has an investment property in Langley. Raj Chouhan’s spouse has a one-third interest in a Burnaby property. Teresa Wat owns an investment condo in Vancouver. Norm Letnick’s spouse has an investment property in Kelowna. Mike de Jong has an ownership interest in half a dozen investment properties in Abbotsford.

And then there are the oddities, situations where it’s unclear what would count as a principal residence and what wouldn’t. Michael Lee lists ownership as a trustee for a family member on a house in Vancouver (other than his residence), as does his spouse. His spouse also has a one-seventeenth interest in agricultural property in Langley.

Anne Kang and her spouse each own residential properties in Burnaby. Katrina Chen co-owns a residence in Vancouver with family and has a second home in Burnaby with her spouse. Ian Paton owns a home in Delta while his spouse owns one in Abbotsford.

George Heyman has a house in Vancouver, but with his spouse has a second house in Vancouver and a recreational property at an unspecified location in B.C.

Other properties are unlikely to be affected. Katrine Conroy has grazing land in the Kootenays, for example. John Rustad owns a wood lot license and four other pieces of rural property.

Several MLAs have interests in properties that are clearly out of reach of the tax. Doug Clovechok has an investment property in Calgary. Tracy Redies owns investment properties in Saskatoon and Virginia. Rick Glumac’s spouse has an investment property in Denver. Mike Farnworth has an investment property in the United Kingdom. Jagrup Brar has interests in properties in Alberta and India and Harry Bains has land in India.

– from ‘Many MLAs Have Personal Interest in Speculation Tax Hit’, Andrew MacLeod, The Tyee, 12 Mar 2018

File Under Tags: ‘Tolerant Vancouver Renter’ and ‘YouGottaBeKiddinMe’

“I’m an international student. When I moved here I asked for advice about the best place for me to live. I needed something close to my lab at VGH and also near to UBC, and Kitsilano sounded great. I was told to search on Craigslist, even though I’d heard it could be a bit sketchy. I thought, ‘How bad could it be’?

“The first apartments I viewed didn’t work out. They were closets downtown, or rooms separated in half by curtains. Then I found this house that seemed almost too good to be true. It was a great location, and the ad said that there were a few international people staying there. I never had a chance to Skype with the landlady, but we talked over Facebook Messenger. She seemed nice, and said that I’d have to pay a deposit right then. I did.

“When I got there, I found that there were more than 10 people living in the house. It was the smallest place on the street, and it didn’t look like it could hold so many tenants, but somehow it did. I think there was supposed to be five bedrooms, but the landlady had made plywood or fake walls, and then pushed a lot of people in a big basement. During one month I was there, we had 14 people staying. It was cramped, but I’d paid my deposit so I thought I’d stick it out.

“The first few weeks were okay. Everyone there was really nice. No one locked the doors, and people didn’t steal from each other. It was quite hippie, but nice. The landlady wasn’t around a lot, and that was cool. But then it started getting weird.

“She started moving more and more of her stuff into the house, even though she didn’t live there. She kept taking things from us. At one point, we had a washing machine and a dryer, and then all of a sudden it vanished. We got a new one that we paid for, but she told us we couldn’t have it because the neighbours were complaining. I have a suspicion she took it and sold it.

“She kept pushing more and more people into the house until it didn’t feel safe. Out of nowhere, six new international people would suddenly show up. Some would just stay in a van on the front yard, and she would charge $500 a week just for the sake of having them somewhere. Every now and again, a random person would wander in, and when we asked them who they were, they said they were there to view a room. The landlady wouldn’t say they were coming round, and after we tried to call her, she’d tell us to show them the house even though we didn’t know which room they were meant to be seeing.

“What pushed me over my limit was when she started doing odd renovations and spray painting everything. I’d go down and look at the basement, and the whole place would suddenly be bright pink, and the door would be sprayed gold. Then half the bathroom would be silver. It was just so strange.

“I found out she wasn’t technically the landlord, but was acting as a property manager. The weird thing was that I paid rent to her 16-year-old son. He would meet me on a street with two big dogs, and I would give him an envelope of money. She didn’t want to have any electronic transfers or any documentation of the rent. I don’t think she wanted the money to be able to be traced. We didn’t know who owned the place, but it looked like she handed over the rent to a guy who would randomly pull up in a van about once a month.

“I was there for five months. I definitely stayed too long, but it was tough because everything else I saw wasn’t even a room—it was a wardrobe with a curtain—or it would be really far away from my work. It was hard to find something.

“I was glad when I finally left. I haven’t been by the house since, but it’s tempting to walk past and see if it’s still standing.”

– whole story from Renters of Vancouver: “I paid rent to her 16-year-old son”, Kate Wilson, Georgia Straight, 10 Mar 2018