ENM On Rental Housing Exemption from Luxury Tax

In the 2018 budget released in February, the NDP followed through on a campaign promise by levying a new school tax on luxury homes and buildings valued at more than $3 million. But soon after the budget was announced, they released a clarification that the new tax would not apply to rental buildings with more than four units.

The clarification came after landlords complained that the new tax would immediately increase rental rates as they passed the cost on to their tenants.

The city now allows for up to four rental units on single-family detached lots, so this new exemption will apply to these types of homes. This includes homes with three rental units and a rented laneway house in the back. The owner does not need to live on the property to be exempt from the school tax.

ENM welcomes this protection for rental buildings and tenants. There are far too many drivers of rent hikes, including ill-advised levies and taxes that raise the cost of construction and delay projects. We believe that incentivizing the development of purpose-built rental housing, like our Willoughby Walk project in Langley, is key to curbing skyrocketing rents. There is a drastic shortage of supply of new rental developments, mainly due to the lack of incentives to build them by developers. This kind of exemption is a step in the right direction to pushing developers to look more closely at taking on purpose-built rental projects.