B.C. raises foreign buyers levy, taxes speculators

Yorkregion.com
Feb. 20, 2018
The Canadian Press

British Columbia is raising its foreign buyers tax and expanding it to areas outside of Vancouver, while bringing in a new levy on speculators, as part of a sweeping plan to improve affordability in the province's overheated housing market.

The New Democrat government unveiled a 30-point housing plan in its first full budget on Tuesday that also increases the property transfer tax and school tax on homes over $3 million, and invests $6 billion in building 114,000 affordable homes over the next decade.

"Our intent is to bring stability to housing prices with these changes and have revenues to invest in building affordable housing," said Finance Minister Carole James in a speech to the legislature.

"We recognize these are bold actions. But that's what B.C.'s housing crisis demands."

The previous Liberal government introduced a 15 per cent tax on homes purchased by foreigners in Metro Vancouver in 2016. Sales slowed for several months before rebounding and prices have continued to rise.

The minority NDP government will increase the tax to 20 per cent and will also apply it to homes in the Fraser Valley, central Okanagan, the Nanaimo Regional District and the Victoria area. The changes take effect Wednesday.

The speculation tax will be introduced this fall. The annual property tax will target foreign and domestic homeowners who do not pay income tax in B.C., including those who leave homes vacant. Satellite families, or households with high foreign incomes that pay little local income tax, will also face the levy.

Exemptions will be available for most principal residences, long-term rental properties and certain special cases, so most homeowners in B.C. won't be affected, James said.

"This tax will penalize people who have been parking their capital in our housing market simply to speculate, driving up prices and removing rental stock," she said.

In the 2018 tax year, the rate will be $5 per $1,000 of assessed value. Next year, the rate will rise to $20 per $1,000 of assessed value. It will initially apply to Metro Vancouver, the Fraser Valley, the Victoria area, the Nanaimo Regional District, Kelowna and West Kelowna.