Quarter Shares Going from Residential to Business Classification
Quarter shares are going from residential to business classification (if it looks and smells like a hotel it's taxed like one).
In many previous articles we mentioned our 'lack of like' for fractional ownership ... quarter-share and in particular most condo hotels. We also mentioned that the province was contemplating classifying most quarter-share units in resorts as businesses (in effect doubling or tripling taxes).
Now the province is doing just that:
Cost are rising for 1/4 share owners who are finding their taxes doubling and tripling after they buy. Taxes on one vacation unit in a Vancouver Island resort jumped from $3,800 to $15,200 when BC Assessment changed its classification from residential to business in a shift that is hitting resort properties around the province.
At Pender Island's Poets Cove resort in the Gulf Islands, strata fees including taxes tack on almost $1,100 a month to the cost of a quarter-share in a townhouse that is listed for sale at $229,000 for 12 weeks of occupancy a year.
At Bear Mountain residential taxes are set at $6.32 per $1,000 of value for a property while business taxes are $20.86 per $1,000 of value, making business taxes three times pricier than residential.
Major Point: We already thought that common area costs in some 1/4 share developments were high ... now the business qualification makes it even less attractive. Add to this, that re-sales are very tough; indeed (much harder to refinance) the higher operating costs will not help that market.