The B.C. government has made last-minute changes to its “speculation and empty homes tax,” halving the rate to 0.5 per cent for all Canadian owners of second homes and promising the revenues will be spent for housing initiatives in the area where taxes are collected.
Finance Minister Carole James announced the changes Thursday, along with B.C. Green Party leader Andrew Weaver, two days after tabling legislation that would have imposed the tax at one per cent on Albertans and other Canadians with second homes in B.C.
Foreign property owners and “satellite families” whose family income is mostly reported outside Canada will pay two per cent of the assessed value.
(See full video of James and Weaver’s news conference at bottom of story.)
James first rolled back the extent of the tax in March after protests from vacation homeowners, and Weaver. The first overhaul exempted the Gulf Islands, Parksville, Qualicum Beach, the Juan de Fuca region in Premier John Horgan’s constituency and rural areas of the Fraser Valley and Central Okanagan.
The property tax now applies only to Metro Vancouver, Greater Victoria and the municipalities of Nanaimo, Lantzville, Abbotsford, Chilliwack, Mission, Kelowna and West Kelowna. It is to take effect based on 2018 assessed property values, with notices to go out early in 2019.
Mayors of affected communities protested loudly about the tax, reporting cancelled housing projects and questioning the assumption that affordable housing would result from people being forced to rent out or sell their vacation homes.
James said the latest change is expected to reduce revenue from the tax by up to $30 million from the original budget estimate of $200 million in revenue.
B.C. Liberal leader Andrew Wilkinson said the NDP government’s tax policy is “collapsing,” with major changes after the government tabled legislation running to more than 100 pages to implement the tax. He said simple arithmetic shows that the repeated slashing of the tax will cost much more than $30 million in revenues.
Wilkinson also questioned the new rule that revenue would go toward new rental housing in the areas where it is collected, an apparent move to placate local governments who want to decide their own vacant-home tax the way Vancouver did.
“Remember, the specific regions hit by the tax are places like Oak Bay, West Vancouver, West Kelowna,” Wilkinson said. “Is that where we need our affordable housing money spent? This is a way to try to pay off the mayors to keep them quiet.”