B.C. Finance Minister Carole James has delivered her promise to impose a speculation tax on homes that sit vacant more than half of the year, focused on urban areas with high housing prices and low rental vacancy rates.
The introduction of the tax bill prompted an immediate demand from the opposition to scrap the tax. B.C. Liberal leader Andrew Wilkinson referred to mayors who objected to the tax at the recent Union of B.C. Municipalities convention, calling it a “fake” tax that has targeted mostly B.C. residents and caused new housing developments to be cancelled.
James said she has met with mayors who called for the tax to be a local decision, and she’s moving ahead.
“We’ve seen examples of families being forced to live in tents, workers and seniors living in their cars and professionals leaving this province,” James told the legislature. “As a result, businesses can’t find the workers they need to keep our economy growing.”
James rolled back the extent of the tax in March after protests from vacation homeowners, exempting 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 tax applies to Metro Vancouver (except Lions Bay and Bowen Island), 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, at 0.5 per cent for B.C. residents, one per cent for Canadians whose principal residence is outside B.C., and two per cent for foreign owners and “satellite families” who don’t pay income tax in B.C.
A satellite family is defined as a family that resides in B.C. but reports half or more of its family income outside Canada. Non-resident Canadians are those who pay income tax in another province.
B.C. Green Party leader Andrew Weaver was among the critics who had the rural areas and islands removed from the tax area. He said Tuesday he is still concerned that the tax may land on property owners who are not speculators.
“I have been raising numerous examples of homeowners who are not speculators who are being unfairly impacted by this tax, and I will be looking to see whether government has addressed these concerns,” Weaver said after the legislation was presented. “In addition, I have raised concerns about the impact of this tax on land under development and its implementation in stratas with no-rental clauses.”
James has stressed that people can avoid the tax by renting out their second residence for half the year or more.