The British Columbia finance minister said Monday that those who speculate on the province’s housing market and drive up prices are in its sights.
Building on the announcement made in the provincial budget, Carole James confirmed details of the speculation tax and said that most BC homeowners will be exempt.
“Our government wants to make sure people who live and work here are able to find and afford a good home in their community,” said James. “For too long, this housing crisis was allowed to escalate, and it has hurt working families, renters, students, seniors and others around the province. With this new tax, we’re targeting speculation in the housing market and freeing up vacant housing to be homes for British Columbians.”
She added that those who own homes in smaller communities, and cottages at the lake or islands will not pay the tax. But those who are just seeking to benefit from price increases will.
“The speculation tax focuses on people who are treating our housing market like a stock market,” she said.
Exemptions will apply for British Columbians’ primary residences and for qualifying long-term rentals. Also, those with second homes valued up to $400,000 will receive a tax credit to offset the tax.
The BC government will enact legislation to introduce the tax.
The key facts:
On implementation, the speculation tax will apply to:
- Metro Vancouver
- The Capital Regional District (excluding the Gulf Islands and Juan de Fuca)
- Kelowna and West Kelowna
- Abbotsford, Chilliwack and Mission
In 2018, the tax rate for all properties subject to the tax is 0.5% of the property value.
In 2019 and subsequent years, the tax rates will be as follows:
- 2% for foreign investors and satellite families;
- 1% for Canadian citizens and permanent residents who do not live in British Columbia; and
- 0.5% for British Columbians who are Canadian citizens or permanent residents (and not members of a satellite family).