We all know that Oak Bay has been opposed to secondary suites forever. After many years of discussion, Oak Bay now encourages suites in new and existing houses. But beware, our governments – municipal, provincial and federal – have different goals, not always to your benefit.
In order to get permission to make a suite in your house, you must obtain a permit. Plan on many regulations and requirements, ceiling heights, plumbing facilities, parking arrangements, and possibly a requirement to supply charging facilities for an e-car. Don’t have an electric car? A tenant may have one.
Building permit value will be reflected in the increase of the assessed value of your property and annual taxes
Once you have navigated the permit/financing/building process, choose a tenant carefully. The B.C. Tenancy Act is very strict.
In recent years the City of Victoria and Province of B.C. have restricted rental increases for existing tenancies substantially below the municipal annual property tax increase. New rentals in B.C. will suffer the same fate.
Now it’s the turn of the Canada Revenue Agency on behalf of the federal government. Some good YouTube videos are available, search ‘How rental income is taxed in Canada.
By the way, watch out for capital gains tax on your residence/revenue property. It’s not happening now but all governments are constantly seeking new sources of income. Your annual tax return requires a percentage of the portion of your property used for rental. This might bite you.
Gerry Porter
Oak Bay
