B.C.s Bed and Breakfasts got a tax break from the provincial government this week, with B.C. Assessment no longer taxing B&Bs with more than three rooms as hotels.
Under the old system, any B&B with three rooms or less was taxed as residential, while businesses with four rooms or more were taxed as hotels. Under the new mixed system, B&Bs will have their first three rooms taxed as residential and any additional rooms taxed under the hotel rate.
According to Rex Davidson of the Western Canada Bed and Breakfast and Innkeepers Association, the new system will benefit the B&B sector.
"Bed and Breakfast owners and operators with four or more rental units can expect tax savings of up to $3,000 annually thanks to this change in property assessment," said Davidson. "We welcome this change that ensures fairness and helps keep the tourism industry competitive."
Beacon Hill MLA Jeff Bray introduced the new assessment rules on behalf of MLA George Abbott, the Minister of Sustainable Resource Management.
"These small business operators represent a growing niche in B.C.s tourism product, especially here in Greater Victoria, and we have worked closely with them to establish greater tax fairness," said Bray. "This change addresses some long standing property assessment inequities and allows them to be more competitive in this industry."
In Whistler, many Bed and Breakfast owners have already challenged their assessments, and were successful in earning residential status for a percentage of their business. Still, having a new assessment category will help, said one B&B owner.
"We had to challenge (our assessments) and we were able to prove that a certain amount of our bed and breakfast is in fact residential," Joern Rohde of Cedar Springs B&B. "Were all for relief for high taxation, especially when weve seen our taxes probably double in the last two years."
Whistler Bed and Breakfasts have to compete against local hotels, many of which are designated as condo-hotels and taxed as residential. Although hotels and B&Bs attract different customers, Rohde says tax relief does make B&Bs more competitive, allowing businesses to charge customers less and put more money into promotion.