Speculation tax expanding to new communities to deliver more homes for people
The Province is taking action to fight real estate speculation and turn more empty units into homes for people by expanding the speculation and vacancy tax to 13 new municipalities.
“There is a housing crisis across the country and it is creating economic challenges, including people feeling pushed out of their communities and labour shortages,” said Katrine Conroy, Minister of Finance. “With so many people struggling to find secure housing, we have to keep taking action – we can’t afford to pull back. The speculation tax is one of the ways we can help increase affordable housing options for people and communities.”
Expanding the speculation tax is part of B.C.’s Homes for People plan that includes actions to fight speculation, deliver more homes within reach for people, and speed up delivery of new homes.
“There’s something wrong when people are buying up investment homes and keeping them empty while others are living in vehicles and can’t find housing,” said Ravi Kahlon, Minister of Housing. “Homes are meant to be lived in by people in our communities, not used for speculation. While some would cancel the speculation tax – giving a handout to speculators and turning homes back into empty condos – we know that people can’t afford that. We’re taking action to make more homes available for people throughout the province.”
An independent review released in 2022 found that the tax had helped deliver more than 20,000 homes in Metro Vancouver alone. The report included recommendations that government consider taking a phased approach to expanding the speculation and vacancy tax to additional communities to build on the success of the measure and deliver more homes for people.
The speculation and vacancy tax will be applied to the following municipal boundaries to help ensure more empty homes are made available for the people who work and live there:
- Vernon, Coldstream;
- Penticton, Summerland;
- Lake Country, Peachland;
- Courtney, Comox, Cumberland;
- Parksville, Qualicum Beach;
- Salmon Arm; and
- Kamloops.
Residential property owners in these communities will need to declare for the first time in January 2025 based on how they used their property in 2024.
This gives owners in the new areas time to decide how to meet exemption requirements before the tax takes effect. Exemptions include primary residences, properties with a long-term tenant and life events, such as separation or divorce.
More than 99% of people living in B.C. are exempt from paying the tax.
Quotes:
Rob Douglas, mayor, North Cowichan –
“Like other communities across B.C., we are facing a housing crisis in North Cowichan with home prices increasingly out of reach for many working families and a rental vacancy rate close to 0%. We welcome being included as an area in the speculation and vacancy tax. It will help us respond to our housing challenges, and we look forward to seeing funds collected through this tax invested in affordable housing projects in our community.”
Blair Ireland, mayor, Lake Country –
“The expansion of the speculation and vacancy tax does not come as a surprise to us in Lake Country. It has always made sense to align major policy throughout communities of the Central Okanagan and, as such, we are now in line with the City of Kelowna. This decision provides a cohesive message to all Central Okanagan builders and buyers and less confusion for taxpayers.”
Bob Wells, mayor, Courtenay –
“The City of Courtenay takes housing accessibility and affordability in Courtenay seriously and see the speculation tax as another tool to assist in making more housing available to residents. The city will continue to make the approval of new housing a priority and share the provincial government’s commitment to the development of new housing options for all residents. We hope this helps increase our vacancy rate, which was only 0.8%, with 3.1% of private dwellings sitting empty in 2022.”
Vickey Brown, mayor, Cumberland –
“Expanding the speculation and vacancy tax to include our community isn’t just about property. It’s about ensuring each community has strong neighbourhood connections instead of empty houses; it’s about turning houses into homes instead of a collection of assets; and it’s about creating vibrant communities filled with life.”
Quick Facts:
- The speculation and vacancy tax was initially expanded to six new communities in 2022 for the 2023 tax year.
- With the addition of these 13 communities, the tax will apply to a total of 59 communities.
- Since 2018, more than $313 million was raised through the tax to go back into affordable housing in regional districts where the speculation and vacancy tax is applied.
- During the same period, the B.C. government invested $3.9 billion in housing initiatives in the regional districts where the speculation-tax communities are located.
- The speculation and vacancy tax rate is 2% for people who don’t pay the majority of their taxes in Canada, or 0.5% for Canadian citizens or permanent residents who pay the majority of their taxes in Canada.
Learn More:
To learn how the speculation tax applies, such as how to declare and exemptions, visit: https://gov.bc.ca/spectax
To read the Speculation and Vacancy Tax five-year review report, see: http://news.gov.bc.ca/files/Speculation_Vacancy_Tax_Review.pdf
To learn about the Homes for People plan, visit: https://news.gov.bc.ca/releases/2023HOUS0019-000436
A backgrounder follows.