September 13, 2019

Andrew Campbell 

The speculation and vacancy tax of British Columbia is a part of government's 30-Point Plan to make housing more affordable for people in the province. The new tax is designated to tackle the housing crisis in major urban districts, where housing prices and rents have risen out of reach for most residents.

By levying the highest tax rate on foreign owners and satellite families, defined as those who earn a majority of income outside Canada and pay little to no income tax in the province, the speculation and vacancy tax is considered a way to make sure these property owners are paying their fair share in taxes. All owners of residential property in the designated taxable regions of B.C. must file an annual declaration. But, over 99% of British Columbians are estimated to be exempt from the tax.

The British Columbia government recorded in the 2018-19 fiscal year that B.C. residents paid an average speculation tax of $2,557 and other Canadians paid $3,540, while foreign property owners paid $5,530 on average and satellite families paid $6,333. As for the tax on vacant development land, the tax rate was 0.5% for Canadian citizens or permanent residents and 2% for foreign owners and satellite families.

Despite opposition is questioning the effectiveness of the speculation and vacancy tax and arguing it has hurt development and punished people with second properties, Finance Minister Carole Alison James commented the speculation and vacancy tax has proven valid in the right direction for lowering housing prices and easing rental vacancies in the province of British Columbia. Minister James also announced the 2018-2019 public accounts in July showing the tax had generated $115 million to the province and it would use the revenue to fund affordable housing.

Photo:Webshot.