B.C. clarifies speculation tax provisions
Paolo Taruc
Canadian Real Estate Wealth
British Columbia’s speculation tax will not apply to residents with second homes outside of high-cost, designated urban areas, as well as many who own vacation properties, the province’s government has clarified. B.C. Minister of Finance Carole James said Monday the levy focuses on people who are treating our housing market like a stock market.
“So people in smaller communities, those with cottages at the lake or on the islands, will not pay this tax. People with second homes outside of high-cost, designated urban areas will not pay the tax. We are going after speculators who are clearly taking advantage of the market, leaving homes vacant and driving up prices,” James said in a statement.
The speculation tax will apply to:
- Metro Vancouver
- The Capital Regional District (excluding the Gulf Islands and Juan de Fuca)
- Kelowna and West Kelowna
- Nanaimo-Lantzville
- Abbotsford, Chilliwack and Mission
According to figures released by the government, 99% of British Columbia residents will not pay the tax. The levy was announced in the 2018 budget. All properties subject to the tax this year will be charged a 0.5% rate based on their respective values. From 2019 onward, the rate will be based on status of residence:
- 2% for foreign investors and satellite families
- 1% for Canadian citizens and permanent residents who do not live in British Columbia
- 0.5% for British Columbians who are Canadian citizens or permanent residents (and not members of a satellite family)
There will also be exemptions for homeowners facing special circumstances, such as those undergoing long-term medical care in medical facilities or those who are temporarily away for work purposes. British Columbians with vacant second homes valued up to $400,000 will also be eligible for a non-refundable tax $2,000 credit that is immediately applied against the speculation tax.
“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,” James said.
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