B.C. is expanding its speculation and vacancy tax to target more communities in the province.
Starting January 2023, the tax will apply to properties in Squamish and Lions Bay. Duncan, North Cowichan, Lake Cowichan, and Ladysmith will also be added to the list.
Finance Minister Selina Robinson says the decision to add these areas is based on near-zero vacancy rates, as well as home purchasing pressure and changes to purchasing behaviour in certain regions.
The province says the speculation tax has shown to help keep prices and rents lower than they would be without the tax. It adds it has helped “encourage the return of approximately 20,000 condo units to the long-term rental market in Metro Vancouver.”
The Southern Gulf Islands and the resort community of Whistler will continue to be exempt from the speculation tax.
“Resort communities have a slightly different challenge and a different role to play in our province,” Robinson said. “We’re monitoring this very closely and we are incrementally looking at how to best use this tax. We’re going to continue to monitor how things play out in vacation areas.”
“[We need to] recognize those as unique communities, and try to figure out how to support them in their work to bring about housing affordability.”
Squamish Mayor Karen Elliott supports the move, saying housing costs are affecting everyone in her community.
“Our citizens want to see that we are addressing both the supply side, as well as advocating for demand-side policies that help make housing more attainable,” she said.
The tax currently only applies to communities in Metro Vancouver, Abbotsford, Mission, Chilliwack, Kelowna, West Kelowna, Nanaimo, Lantzville, and the Capital Regional District (which includes Victoria and Saanich).
Since the changes come into effect in January 2023, homeowners in the communities that are being added for the speculation tax will have to declare and claim an exemption for the first time in January 2024.
“Exemptions are available for primary residences, properties with a long-term tenant, and a number of other special circumstances. The Province anticipates that more than 99% of British Columbians will continue to be exempt from paying the tax,” according to the province.
BC Greens applaud speculation tax expansion, want more communities added
The leader of the BC Greens is pleased with the additions.
“Addressing this crisis requires a variety of policies targeted at both supply and demand, and the data on the impact of this tax so far is encouraging,” said Sonia Furstenau, who is also MLA for Cowichan Valley, an area that is being added in January.
B.C.’s other Green MLA, Adam Olsen, wishes more people in his riding of Saanich North and the Islands were included in this change.
“I am deeply disappointed that the Southern Gulf Islands were not included. I will be reaching out to the Minister to find out what the rationale was for the exclusion.”
As the Greens push for more to be done, Furstenau is challenging the BC NDP’s David Eby, who is the Attorney General and minister responsible for housing.
“Housing is a human right; the Attorney General and candidate for leadership of the BC NDP said he agrees with this principle in Question Period last year. I would like to see our government’s actions reflect those words.”
On Tuesday, Eby announced he is seeking the BC NDP leadership. So far, he is the only person in the running to replace Premier John Horgan, who will step down when a new leader is elected in December.
The speculation and vacancy tax applies based on ownership as of Dec. 31 each year. It is two per cent for foreign owners and satellite families, and 0.5 per cent for Canadian citizens or permanent residents who are not members of a satellite family.
“A home that is not a principal residence must be rented for at least six months per year to be exempt from the speculation and vacancy tax. Short-term rentals for periods of less than one month do not count towards the six-month total,” the province states on its website.