B.C. housing starts were up 16 per cent in 2019, with lack of supply identified as a key element of B.C. urban home prices and rents that are among the highest in Canada. (Vernon Morning Star)

B.C. housing starts were up 16 per cent in 2019, with lack of supply identified as a key element of B.C. urban home prices and rents that are among the highest in Canada. (Vernon Morning Star)

Speculation tax doesn’t slow B.C.’s hot housing market

$88 million raised mostly from foreign owners in 2019

The second year of B.C.’s speculation and vacancy tax raised $88 million in 2019, less than half of what was expected when the tax on empty homes in major urban centres with tight vacancy rates went into full effect.

The B.C. finance ministry reported Monday that the tax continues to be paid mostly by non-resident owners and “satellite families,” and that the latest data from affected regions show more properties being offered for long-term rental in order to avoid paying the tax. But urban rents remain high and B.C.’s housing market roared back with record sales in the second half of 2020 after a lull imposed by the COVID-19 pandemic.

B.C.’s average rental vacancy rate increased by seven per cent in 2019, the ministry reported Jan. 11. By the second half of 2020, the top three most expensive rents in Canada, behind Vancouver and Toronto, were Burnaby, Victoria and Kelowna.

The speculation tax applies to secondary homes vacant for six months of the year or more in the designated cities of Abbotsford, Chilliwack, Mission, Kelowna, West Kelowna, Nanaimo, Lantzville, Metro Vancouver and the Capital Regional District around Victoria. All property owners in the affected regions have to fill out an annual declaration of their property occupany, with the next declaration period expected this month.

A major exemption to the empty homes tax comes from apartment properties where the strata council bans rentals. Former finance minister Carole James extended that exemption to the end of 2021, after which the tax would apply to an estimated 5,400 apartments if they are not occupied at least six months of the year.

RELATED: Metro Vancouver property sales shatter record in December

RELATED: Rising income, property transfer tax curb record B.C. deficit

RELATED: Kelowna the fifth-most expensive rental city in Canada

Applied to assessed value each calendar year, the tax started at 0.5 per cent of value for 2018, and rose to two per cent for 2019 for owners who are not citizens or permanent residents of Canada. Former B.C. Green Party leader Andrew Weaver demanded that only foreign owners should be subject to the two per cent rate, and the minority NDP government complied.

Preparing for an annual meeting with mayors of affected municipalities, Finance Minister Selina Robinson acknowledged that housing is still to expensive for many people in B.C. The speculation and vacancy tax has brought in $130 million since it was brought in by the NDP government in 2018, with revenues used for subsidized housing projects in the five regional districts where it is collected.

Speculation and vacancy tax revenues are a trickle compared to B.C.’s property transfer tax on every sale. The province was able to spend more on COVID-19 support payments without pushing its projected deficit past the $14 billion mark, due in part to property transfer tax revenues that exceeded budget projections by $479 million in the first half of the 2020-21 fiscal year.


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

BC legislatureBC politics

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Members of the Wheeling 8’s dance group go on a roll at Surrey’s Chuck Bailey Recreation Centre in 2018, during the club’s 45th-anniversary event. If not for the pandemic, such activities could be socially prescribed as part of a new program involving Fraser Health and DiverseCity Community Resources Society. (File photo: Tom Zillich)
‘Social prescriptions’ connect Surrey seniors to activities and other services they need

Fraser Health-backed program involves GP referrals to a Seniors’ Community Connector with DiverseCity

Linda Annis, Aug. 12, 2020. (Photo: Malin Jordan)
Annis wants independent auditor general for Surrey

‘Surrey taxpayers deserve the best possible oversight of the tax dollars they send to city hall,’ Surrey councillor says

rcmp
South Surrey neighbours’ calls to police lead to break-and-enter arrest

‘Prime example’ of RCMP and public working together, constable says

SkyTrain’s end of the line, for now, in Whalley. (File photo)
Provincial budget watchers lament no mention of Surrey SkyTrain expansion

But $1.66 billion is earmarked for a second hospital for Surrey, in Cloverdale

A large crowd protested against COVID-19 measures at Sunset Beach in Vancouver on Tuesday, April 20, 2021. (Snapchat)
VIDEO: Large, police-patrolled crowds gather at Vancouver beach for COVID protests

Vancouver police said they patrolled the area and monitored all gatherings

Thousands have converged in Whonnock Lake Park to enjoy the nice weather. (Roxanne Hooper/The News)
Thousands enjoy B.C. park with warnings about social distancing

Portable toilets installed in anticipation of nice weather

FILE – The Instagram app is shown on an iPhone in Toronto on Monday, March 19, 2018. THE CANADIAN PRESS/Graeme Roy
Judge acquits B.C. teen boy ‘set up’ on sex assault charge based on Instagram messages

The girl and her friends did not have ‘good intentions’ towards the accused, judge says

Kai Palkeinen recently helped a car stuck on the riverbed near the Big Eddy Bridge. While the car could not be saved, some of the driver’s belongings were. It’s common for vehicles to get stuck in the area due to significantly changing river levels from Revelstoke Dam. (Photo by Kai Palkeinen)
“I just sank a car’: Revelstoke resident tries to save vehicle from the Columbia River

Although it’s not permitted, the riverbed near the city is popular for off roading

Playland at the PNE is set to reopen this May, with COVID-19 health and safety measures approved by the province. (Website/Playland)
VIDEO: Playland at PNE scheduled to reopen this May to masked customers

British Columbians are discouraged from travelling outside of their local health authority to visit the theme park

Meng Wanzhou, chief financial officer of Huawei, walks down the street with an acquaintance after leaving B.C. Supreme Court during a lunch break at her extradition hearing, in Vancouver, B.C., Thursday, April 1, 2021. A judge is scheduled to release her decision today on a request to delay the final leg of hearings in Meng Wanzhou’s extradition case. THE CANADIAN PRESS/Rich Lam
B.C. judge grants Meng Wanzhou’s request to delay extradition hearings

Lawyers for Canada’s attorney general had argued there is no justification to delay proceedings in the case

B.C. Premier John Horgan announces travel restrictions between the province’s regional health authorities at the legislature, April 19, 2021. (B.C. government photo)
B.C. sees 862 more COVID-19 cases Wednesday, seven deaths

Recreational travel restrictions set to begin Friday

B.C. Finance Minister Selina Robinson is photographed following her budget speech in the legislative assembly at the provincial legislature in Victoria, Tuesday, April 20, 2021. THE CANADIAN PRESS/Chad Hipolito
B.C. budget lacks innovative drive, vision during uncertain times, say experts

Finance Minister Selina Robinson’s budget sets out to spend $8.7 billion over three years on infrastructure

Using panels kept cold by water circulating within them, B.C. researchers compared thermal comfort in 60 of the world’s most populous cities, including Toronto. (Lea Ruefenacht)
B.C. researchers use air conditioning to combat spread of COVID particles

Dr. Adam Rysanek and his team have proven a new worthwhile system – a mixture of cooling panels and natural ventilation

Most Read