Victoria Mayor Lisa Helps hopes to meet with provincial Housing Minister Selina Robinson to press the city’s case for a change in how condominiums used as vacation rentals are assessed.
Council voted to press for the meeting Thursday in response to a letter from Robinson, who called the issue of short-term rentals “complex” and said amending the Assessment Act would be time-consuming and have substantial assessment policy, legislative and tax implications.
The city had written to the province to ask for the change through the B.C. Assessment Authority, which would see the units assessed as commercial for tax purposes.
Coun. Ben Isitt said the change would be the most effective way to return a lot of units to the long-term rental pool.
Under the current assessments, a condominium unit assessed as residential might pay $2,500 per year in taxes, Isitt said. If it is being used year-round as a short-term vacation rental on a platform such as Airbnb, it should more properly be assessed as a commercial property. That would see the property tax bill go to about $8,000 from $2,500.
“That’s a very strong market signal to move that unit back into the housing supply or to have the operator of that unit price the unit at a rate that reflects that taxation,” Isitt said.
The current assessment system amounts to a subsidy to owners of units used full time as vacation rentals, he said.
“Right now, this essential subsidy provides a very unfair advantage to commercial [short-term rental] operators compared to other providers of transient accommodation and it also really undermines the city’s housing affordability objectives,” he said.
The city last year introduced a number of new regulations surrounding short-term rentals, including requiring short-term rental operators to obtain a business licence, to comply with requirements such as displaying a business licence number in all advertisements and to adhere to all city bylaws, including noise and nuisance bylaws.
The city in December also began enforcing for vacation rentals being operated contrary to zoning (such as in residential neighbourhoods).
Use of secondary suites within homes in residential neighbourhoods as short-term rentals is not permitted.