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

Delta View Care Centre (Google Street View image)
COVID-19 outbreak over at Delta long-term care facility, says Fraser Health

Good Samaritan Delta View Care Centre outbreak first declared on Nov. 1, 2020

Judy and Ken Reid share a smile at Peace Arch Hospital in 2018. Judy raised concerns last month about how the COVID-19 vaccine would be rolled out. Now, she says no one is telling residents or families when they will start to see restrictions ease. (Contributed photo)
Timeline for reduced restrictions in long-term care a concern for spouse of South Surrey senior

‘We’re not yet at that point,’ says provincial health officer

RCMP. (Phil McLachlan - Capital News)
Police called to Surrey home for report of weapon, man taken into custody

Surrey RCMP say people evacuated from house, one found in a bedroom ‘hiding from police’

Students at Creekside Elementary in Surrey wrote letters to seniors over the holidays, and are planning to write more for Valentine’s Day and Family Day. (Photo: surreyschools.ca)
Surrey elementary students connect with seniors through letter writing

Creekside students planning to send more cards for Valentine’s Day

Surrey Fire Service responded to a fire in the industrial area of 192nd street and 54th Avenue early Saturday morning (Jan. 23, 2021). (Photo: Shane MacKichan)
Surrey crews respond to fire in industrial area

Fire happened early Saturday morning

U.S. Senator Bernie Sanders sits in on a COVID-19 briefing with Dr. Bonnie Henry, provincial health officer, and Adrian Dix, B.C. minister of health. (Birinder Narang/Twitter)
PHOTOS: Bernie Sanders visits B.C. landmarks through the magic of photo editing

Residents jump on viral trend of photoshopping U.S. senator into images

sd
VIDEO: Mission drag racer scores 1st career win, sets world record, makes history in 2020

Justin Bond, founder and owner of JBS Equipment Mission, has break-out year

A 75-year-old aircraft has been languishing in a parking lot on the campus of the University of the Fraser Valley, but will soon be moved to the B.C. Aviation Museum. (Paul Henderson/ Chilliwack Progress)
Vintage military aircraft moving from Chilliwack to new home at B.C. Aviation Museum

The challenging move to Vancouver Island will be documented by Discovery Channel film crews

Giants defenceman Bowen Byram has recorded his first NHL career point (Rob Wilton/special to Langley Advance Times)
VIDEO: Vancouver Giants Bowen Byram records first NHL career point with Colorado Avalanche

Player with Langley-based WHL franchise assisted on goal against the Ducks

A video posted to social media by Chilliwack resident Rob Iezzi shows a teenager getting kicked in the face after being approached by three suspects on Friday, Jan. 22, 2021. (YouTube/Rob i)
VIDEO: Security cameras capture ‘just one more assault’ near B.C. high school

Third high-school related assault captured by Chilliwack resident’s cameras since beginning of 2021

FILE - In this Feb. 14, 2017, file photo, Oklahoma State Rep. Justin Humphrey prepares to speak at the State Capitol in Oklahoma City. A mythical, ape-like creature that has captured the imagination of adventurers for decades has now become the target of Rep. Justin Humphrey. Humphrey, a Republican House member has introduced a bill that would create a Bigfoot hunting season, He says issuing a state hunting license and tag could help boost tourism. (Steve Gooch/The Oklahoman via AP, File)
Oklahoma lawmaker proposes ‘Bigfoot’ hunting season

A Republican House member has introduced a bill that would create a Bigfoot hunting season

Economic Development and Official Languages Minister Melanie Joly responds to a question in the House of Commons Monday November 23, 2020 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Federal minister touts need for new B.C. economic development agency

Last December’s federal economic update promised a stimulus package of about $100 billion this year

FILE - In this Nov. 20, 2017, file photo, Larry King attends the 45th International Emmy Awards at the New York Hilton, in New York. Former CNN talk show host King has been hospitalized with COVID-19 for more than a week, the news channel reported Saturday, Jan. 2, 2021. CNN reported the 87-year-old King contracted the coronavirus and was undergoing treatment at Cedars-Sinai Medical Center in Los Angeles. (Photo by Andy Kropa/Invision/AP, File)
Larry King, broadcasting giant for half-century, dies at 87

King conducted an estimated 50,000 on-air interviews

Kimberly Proctor, 18, was murdered in 2010. Her family has spent many of the years since pushing for a law in her honour, that they say would help to prevent similar tragedies. (Courtesy of Jo-Anne Landolt)
Proposed law honouring murdered B.C. teen at a standstill, lacks government support

Ministry of Mental Health and Addictions has concerns with involuntary detainment portion of act

Most Read