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

Rod Alsop and the LSS band had a great day holding class outdoors at Transfer Beach. (Cole Schisler photo)
Ladysmith Secondary School band takes class outside to mark the end of academic quarter

The band took advantage of a sunny January day to play outside

Jessica Lowry created a series of videos to engage Ladysmith Intermediate School students in mindfulness. (Submitted photo)
Ladysmith Intermediate teams up with local artist to introduce students to mindfulness

Ladysmith artist Jessica Lowry created a series of 36 videos to help students practice mindfulness

Luke Marston works on the seawolf mask for Canucks goalie Braden Holtby. (Mike Wavrecan photo)
Stz’uminus artist Luke Marston designs new mask for Canucks goalie

The mask features artwork inspired by the Coast Salish legend of the sea wolf

Scott Saywell, Nanaimo Ladysmith Public Schools’ superintendent and CEO, has seen his contract renewed for four years, the district announced Wednesday. (SD68 YouTube screenshot)
Ladysmith school district renews superintendent’s contract for four years

‘Singing superintendent’ Scott Saywell under contract through 2024-25 school year

Emergency services were on scene at 1st Avenue and Warren Street after a skateboarder was struck by a vehicle. (Submitted photo)
Skateboarder ‘bumped’ by vehicle on 1st Avenue

Emergency services personnel say the skateboarder is uninjured

Syringe is prepared with one of B.C.’s first vials of Pfizer vaccine to prevent COVID-19, Victoria, Dec. 22, 2020. (B.C. government)
B.C.’s COVID-19 caseload stays steady with 465 more Tuesday

No new outbreaks in health care facilities, 12 more deaths

Stand up paddleboarder Christie Jamieson is humbled to her knees as a pod of transient orcas put on a dramatic show on Jan. 19 in the Ucluelet Harbour. (Nora O’Malley photo)
Updated: Ucluelet paddle boarder surrounded by pod of orcas

“My whole body is still shaking. I don’t even know what to do with this energy.”

Inmates at Metchosin’s William Head Institution are being given COVID-19 vaccines as part of the first phase. Around 600 inmates will be vaccinated in the coming days. (Black Press Media file photo)
William Head prison inmates in receive first doses of COVID vaccine

Priority set for older inmates and those with underlying medical conditions

New Westminster TV production designer, Rick Whitfield, has designed an office in a box for British Columbians in need of a private workspace. (BC Box Office photo)
PHOTOS: B.C. man designs ‘box office’ solution for those working from home

‘A professionally designed workspace on your property, away from the distractions of home’

Chilliwack ER doctor Marc Greidanus is featured in a video, published Jan. 18, 2021, where he demonstrates and describes effectiveness of various styles of masks. (Youtube)
VIDEO: Emergency room doctor runs through pros and cons of various masks

‘We’ve been asked to wear a mask and it’s not that hard,’ Greidanus says.

(Pixabay photo)
VIDEO: Tip to Metro Vancouver transit police helps woman 4,000 km away in Ohio

Sgt. Clint Hampton says transit police were alerted to a YouTube video of the woman in mental distress

A woman types on her laptop in Miami in a Monday, Dec. 12, 2016, photo illustration. THE CANADIAN PRESS/AP/Wilfredo Lee
British Columbia government lax on cybersecurity practices, auditor reports

The audit did not highlight a specific threat, but it found breaches in cybersecurity are increasing globally

A water taxi at Victoria’s Fisherman’s Wharf. (Black Press Media file photo)
Man arrested after stolen water taxi raced up Victoria’s Gorge Waterway

Man is facing recommended charges of theft over $5,000 after leading police on marine chase

A mattress on fire gutted the second floor hallway at Town Park Apartments C-block Jan. 17. (Port Hardy Fire Rescue images)
‘Suspicious’ Port Hardy apartment fire could keep tenants out of their homes for months

A burning mattress created smoke and heat, causing several tenants to jump from windows

Most Read