Two federal acts coming into effect this tax season will have a serious impact on current and future homeowners in Sun Peaks.
The first is called the Underused Housing Tax Act, which affects non-full-time residents that own property in Sun Peaks. As a result, those homeowners must file an Underused Housing Tax (UHT) 2900 form this tax season.
The UHT is one per cent of the assessed home value. To file, homeowners need a social insurance number or individual tax number, which can take up to two months to receive. There is a minimum $5,000 fine for not filing. Non-resident Sun Peaks owners are eligible for a tax exemption if they meet specific qualifications but are still required to file.
Exemption qualifications for the Underused Housing Tax include vacation properties in an eligible area used for at least 28 days of the year by the owner or the owner’s spouse or common-law partner, homes that are the primary residences of an owner or their spouse, common-law partner or child attending school, or homes that meet qualifying occupancy periods for 180 days in a calendar year.
A qualifying occupancy period is at least one month long and requires the occupant to be in the residence for the month. The occupant needs a written contract and deals at arm’s length with the owner or their spouse or common-law partner. Someone who pays “fair” rent for the space but isn’t at arm’s length of the owner also qualifies.
The qualifying occupant can also be the owner, or their spouse or common-law partner, if they have a Canadian work permit. If the occupant has Canadian citizenship or permanent residency and is the owner or their spouse, common-law partner, parent or child, they also qualify.
The CRA website has a complete list of the different tax exemptions.
Sun Peaks Mountain Resort Municipality (SPMRM) Mayor Al Raine said he and the council have been in frequent conversations with the CRA to determine how the act will impact owners in Sun Peaks and whether COVID-19 travel restrictions would be taken into consideration. Some owners may have been unable to come to Sun Peaks for 28 days in 2022 due to travel restrictions, he explained.
“[For people impacted by travel restrictions] they basically say, ‘well, the rules are the rules,’ whether they make sense or not, and then they kind of fall back on the position.”
Raine estimated 70 to 80 per cent of homeowners in Sun Peaks will need to file a UHT 2900 — but if they meet requirements for exemptions, they won’t be taxed.
According to Raine, the CRA must clarify whether condo-hotels in the village are considered business or residential properties. However, the CRA did say to Raine that if homes are zoned as tourist accommodations and the owners pay residential property taxes, they are considered residential properties and thus impacted.
United States citizen and Sun Peaks owner Donna Kelleran has owned a property in Sun Peaks since 2007. She wants to make sure owners know the financial impacts the tax could have, considering some haven’t been in Sun Peaks for 28 days over the last tax year.
While Kelleran is exempt because she has been in Sun Peaks for that time period in the last year, she isn’t sure how she’s expected to prove it. She also has friends who were affected by COVID-19 travel restrictions and won’t meet the 28-day requirement.
“We were not allowed here for almost a year and a half. We get up in August, and by January, we’re told [about this new law],” Kelleran said.
She added the government could have delayed the act for a year because of COVID-19 restrictions and said the requirements haven’t been communicated well.
The second legislation impacting residential ownership in Sun Peaks is the Prohibition on the Purchase of Residential Property by Non-Canadians Act. The act was enacted on Jan. 1, 2023, and will be enforced for two years.
According to a Dec. 2022 statement by Ahmed Hussen, the federal minister of housing and diversity and inclusion, the Act is designed so that “housing is owned by Canadians, and not by foreign investors.”
There are exemptions for properties outside of census metropolitan areas or census agglomerations. However, according to Raine, Sun Peaks is part of the census metropolitan area of Kamloops, meaning the village is affected by the ban despite the municipality advocating for an exemption.
Raine said Sun Peaks, Silver Star and Apex resorts are the only resorts in B.C. affected by the ban on non-Canadian ownership. He called this an “oversight” and said SPMRM will continue pressuring the federal government to provide an exemption for Sun Peaks.
The Mayor and council have released a statement and advice about both acts on SPMRM’s website.
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