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

Letter writers weigh in on the City of Nanaimo adopting ‘doughnut’ economics as a guiding principle for decision-making.
LETTERS TO THE EDITOR: City of Nanaimo’s ‘doughnut’ has to be more than empty calories

Letter writers react to city council’s recent decision to adopt ‘doughnut’ economic model

Emergency crews were called to a crash involving a car and a minivan Saturday afternoon at the old Island Highway and Mary Ellen Drive. (Greg Sakaki/News Bulletin)
One person taken to hospital after crash in north Nanaimo

Car and minivan collided Saturday at the intersection of the old Island Highway and Mary Ellen Drive

Nanaimo Unique Kids Organization, a non-profit, seeks to raise $8,000 for a play structure to help children remain active during the COVID-19 pandemic. (Chris Bush/News Bulletin)
Nanaimo Unique Kids Organization asking for help fundraising for play structure

Physical activities have been limited due to COVID-19 restrictions, says non-profit

Police in Nanaimo hope to find the owner of a Giant Reign mountain bike that was seized after a man was spotted riding it without a helmet on the wrong side of the road on Christmas Eve. (Photo submitted)
Nanaimo RCMP suspicious to find expensive bike covered in layer of duct tape

Police looking for owner of Giant Reign mountain bike that they believe was stolen

A still from surveillance footage showing a confrontation in the entranceway at Dolly’s Gym on Nicol Street on Friday morning. (Image submitted)
Troublemaker causes pain and damage at downtown Nanaimo gym

VIDEO: Suspect breaks fire alarm, slams door on business owner’s foot after attempting to defraud her

Emergency crews were called to a crash involving a car and a minivan Saturday afternoon at the old Island Highway and Mary Ellen Drive. (Greg Sakaki/News Bulletin)
One person taken to hospital after crash in north Nanaimo

Car and minivan collided Saturday at the intersection of the old Island Highway and Mary Ellen Drive

Cyclists pick up swag and cycling trail maps at city Bike to Work Week ‘celebration station’ a few years ago. (News Bulletin file photo)
City of Nanaimo’s active transportation plan will be about more than infrastructure

City working on goals to double walking trips and quintuple cycling and busing trips

Canada’s chief public health officer Dr. Theresa Tam at a press conference last year. (Canadian Press photo)
LETTER TO THE EDITOR: Better federal vaccine planning badly needed

Why hasn’t Parliament done more to protect seniors and care homes, asks letter writer

A unique-looking deer has been visiting a Nanoose Bay property with its mother. (Frieda Van der Ree photo)
A deer with 3 ears? Unique animal routinely visits B.C. property

Experts say interesting look may be result of an injury rather than an odd birth defect

Kinsmen Participark in Beban Park will be closed next week so city workers can remove dangerous trees and invasive plant species. The work is the start of an improvement project that includes replacing signs and fitness stations in the spring. (Chris Bush/News Bulletin)
Nanaimo fitness park to close for removal of hazard trees and invasive plants

Tree cutting to start in Beban Park’s Kinsmen Participark as part of improvement project

JaHyung Lee, “Canada’s oldest senior” at 110 years old, received his first dose of the COVID-19 vaccine on Thursday, Jan. 14, 2021. He lives at Amenida Seniors Community in Newton. (Submitted photo: Amenida Seniors Community)
(Phil McLachlan - Capital News)
‘Targeted’ shooting in Coquitlam leaves woman in hospital

The woman suffered non-life threatening injuries in what police believe to be a targeted shooting Saturday morning

Standardized foundation skills assessment tests in B.C. schools will be going ahead later than usual, from Feb. 16 to March 12 for students in Grades 4 and 7. (Black Press Media file photo)
B.C. teachers say COVID-affected school year perfect time to end standardized tests

Foundational skills testing of Grade 4 and 7 students planned for February ad March

Sooke’s Jim Bottomley is among a handful of futurists based in Canada. “I want to help people understand the future of humanity.” (Aaron Guillen - Sooke News Mirror)
No crystal ball: B.C. man reveals how he makes his living predicting the future

63-year-old has worked analytical magic for politicians, car brands, and cosmetic companies

Most Read