Madison and Charlotte Becerra, a couple residing in Ladysmith, B.C., on Vancouver Island, are facing the potential loss of their home following an unforeseen tax demand. The B.C. government has levied a $13,000 speculation and vacancy tax against them, payable by July 1, under new regulations affecting their area.
Background
The Becerras, who purchased their Ladysmith home two years prior and live there full-time, are not Canadian citizens or permanent residents. This status precludes them from an exemption to the speculation and vacancy tax, which has been newly implemented in Ladysmith, located about 70 kilometers north of Victoria.
The couple, originally from the United States, chose Ladysmith as their home to escape discrimination they faced as a 2SLGBTQ+ couple. They have since been contributing members of the community, working as in-home care workers and paying local taxes.
The Tax Implication
With the new tax applied, the Becerras are required to pay the substantial amount within five months to avoid a lien on their home, coupled with a 10% late fee and accruing interest. “Having to pay that tax would wipe us out — we just don’t have the money to be able to afford it,” Madison Becerra expressed.
As U.S. citizens, despite their active community involvement and financial contributions in the form of property and income tax, the Becerras are classified as foreign buyers under the rules of the speculation and vacancy tax.
The Response and Appeals
The couple is planning to appeal the tax assessment but have been informed that their non-permanent resident status likely disqualifies them from exemption. The Ministry of Finance allows appeals within 90 days from the assessment date.
Duncan Soproniuk, a certified professional accountant from Nanaimo, acknowledges the broad reach of the vacancy tax program. While he deems the program beneficial overall, he admits it may inadvertently affect unintended targets like the Becerras. Soproniuk suggests revising the program to prevent similar issues in the future.
Financial Impact and Community Contributions
The tax imposition has put a significant financial strain on the Becerras, who have devoted themselves to aiding those with developmental disabilities. The irony of their situation is not lost on them, as Madison notes, “It’s a little bit hard to swallow that we’re expected to pay a vacancy tax meant for leaving our home empty, when we can’t even afford to take a vacation.”
The Bigger Picture
Since its inception in 2018, the speculation and vacancy tax has generated over $394 million, funding affordable housing initiatives in affected regions. These regions have seen more than $5.2 billion allocated for housing projects as of October 2023.
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