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

A sign indicating a COVID-19 testing site is displayed inside a parking garage in West Nyack, N.Y., Monday, Nov. 30, 2020. The site was only open to students and staff of Rockland County schools in an effort to test enough people to keep the schools open for in-person learning. (AP Photo/Seth Wenig)
4 more deaths, 54 new cases of COVID-19 in Interior Health

This brings the total to 66 deaths in the region

Alexandra “Annabelle” Lee and her grandpa Bryan Weightman enjoyed a shopping spree at the Sicamous Askew’s foods location after Weightman won a draw for a gift card. (Submitted)
Sicamous seven-year-old fills grandparents’ shopping cart after contest win

When her grandparents won an Askew’s Foods gift card, Alexandra Lee got to handle the shopping

Staff at R.J. Haney Heritage Village and Museum and community partners are preparing several interactive contests to help celebrate the 25th annual Heritage Week, Feb. 15 to 21. (Contributed)
Public to play interactive role in Salmon Arm Heritage Week celebration

R.J. Haney Heritage Village and Museum silent auction to kick off events on Feb. 15

A large portion of Anglemont is without running water due to a water main break on Jan. 26. (CSRD Image)
A large part of Anglemont in the North Shuswap is without water due to a water line break on Jan. 26. (Black Press File Photo)
Broken water main leaves Shuswap community without running water

The water line has left Anglemont residents either without water or with low pressure.

(Pixabay)
‘Roadmap out of COVID-19’: Innovate BC’s program helping businesses recover

CEO Raghwa Gopal said the tech sector is here to help brick and mortar businesses

Dr. Penny Ballem, a former deputy health minister, discusses her role in leading B.C.’s COVID-19 vaccination program, at the B.C. legislature, Jan. 22, 2021. (B.C. government)
B.C. holds steady with 407 new COVID-19 cases Tuesday

14 deaths, no new outbreaks in the health care system

A Cessna 170 airplane similar to the one pictured above is reported to be missing off the waters between Victoria and Washington State. Twitter photo/USCG
Canadian, American rescue crews searching for missing aircraft in waters near Victoria

The search is centered around the waters northeast of Port Angeles

Kevin Lee Barrett pleaded guilty to the aggravated assault of his mother Eleanor Holmes on Tuesday, Jan. 26. (File)
West Kelowna man who beat his mom could be sentenced up to 9 years

Kevin Barrett entered a surprise guilty plea to the lesser charge of aggravated assault on Tuesday morning

Interior Health reported two more COVID-19 deaths at Sunnybank Retirement Center in Oliver Tuesday, Jan. 26, 2021. (File photo)
COVID-19 claims lives of two more South Okanagan care home residents

Five residents of the Oliver care home have died since the outbreak was first declared

Vernon now has an approved 13 cannabis shops in town. (Jennifer Smith - Morning Star)
Vernon, the ‘Pot capital of B.C.’ greenlights two new stores downtown

Two more shops, within 240 metres, approved, despite neighbouring businesses opposition

11 more cases of COVID-19 have been linked to a cluster on Big White Mountain. Pictured above is TELUS park at Big White Ski Resort, Jan. 26. (Big White Ski Resort)
11 more cases of COVID-19 linked to Big White cluster

This brings the total case count to 225, according to health authorities in a Tuesday update

Jonathon Muzychka and Dean Reber are wanted on Canada-wide warrants. (Courtesy of Victoria Police Department)
Convicted killer, robber at large after failing to return to facility: Victoria police

Dean Reber, 60, and Jonathon Muzychka, 43, may be together

Oliver Elementary School
Former Oliver PAC treasurer charged with fraud returns to court

Belinda Yorke will be in court to fix a date for trial in February

Two fibreglass bees were stolen from Vernon’s Planet Bee Honey Farm Nov. 22, 2020. (Facebook)
Stolen bee returned to Vernon honey farm

Two months after thieves buzzed off with two bee sculptures, public tips led police one of them

Most Read