VANCOUVER, Aug. 4 /CNW/ - The British Columbia Apartment Owners and
Managers Association - the provincial rental housing industry association -
has been challenged by the significant negative gap between the rising costs
associated with rental housing and the allowable rental rate increases. This
gap will continue to widen as the Government of British Columbia recently
proposed combining the provincial and federal sales tax into a single tax - a
12 per cent Harmonized Sales Tax (HST).
The introduction of the HST will attach yet another financial burden on
the industry and tenants. Currently, there is no GST on residential rents, but
rental owners must pay GST on their input costs; residential landlords do not
get input tax credits. This is a significant issue that will negatively impact
the rental housing industry in British Columbia today as it will raise the
operating expenses considerably for the industry. As such, the BCAOMA is
urging the provincial government to address this issue further.
In preparation for the HST roll out in 2010, the BCAOMA conducted
research to determine the impact that HST will have on the industry,
particularly apartment owners' costs. While these are only preliminary
studies, our findings indicate that an additional two-to-three per cent
increase is required just to cover this cost. However, residential apartment
owners do not have the ability to offset these expenses by increasing revenue
due to rent control and they cannot take input credits.
To put it simply, the HST acts as a disincentive for both the maintenance
and the development of new rental housing at a time when rental housing is
already a scarce commodity in many regions of the province.
There is an immediate need for the BCAOMA to engage in discussions with
the Government of British Columbia regarding how our sector can neutralize the
costs associated with the HST either through exemptions and/or flow through
rent adjustments. As the date for the 2010 rent increase announcement is
approaching, our industry requests that the Ministry of Housing and Social
Development gives serious credence to the impact of the HST on our industry.
The BCAOMA respectfully requests the Government of British Columbia's
immediate assistance to work together to identify potential solutions to the
critical rent related issues challenging the rental housing industry today. We
believe that working with the provincial government to find a solution that
will benefit apartment owners and tenants will be a step towards to ensuring
the viability of a sustainable rental housing market in British Columbia.
About the British Columbia Apartment Owners and Managers Association
The BCAOMA represents the owners and managers of more than 100,000 rental
suites in British Columbia. The BCAOMA is committed to ensuring that the
rental needs of British Columbians for safe, secure, well-maintained,
affordable, high quality residential rental accommodation are met.
For further information:
For further information: Marg Gordon, Chief Executive Officer, British
Columbia Apartment Owners and Managers Association, (604) 733-9440