As expected, the BC government’s speculation and vacancy tax passed in the legislature on November 22, 2018. The politically controversial yet publicly supported tax will penalize foreigners who do not pay BC income taxes and leave a home vacant for more than 6 months of the year with a 2% tax on the property’s assessed value. The tax was amended lower to 0.5% for all British Columbians, Canadian citizens, and permanent residents.
Finance minister Carole James took to social media to announce the official implementation beginning January 1, 2019.
“This is an important step forward that will curb foreign ownership, tackle speculation and return empty homes to the housing market for British Columbians to actually live in. The last government looked the other way as the housing crisis spiralled out of control and an entire generation was priced out of the housing market. Today marks a change in direction. The era in which government turned a blind eye to speculators, foreign owners and satellite families taking advantage of an overheated housing market is over. It won’t be easy, but we will rein in the out-of-control housing market. I’m enormously proud that we are moving forward with this important work. We will continue to do the right thing for all British Columbians, not just the few – because the people who live and work in our province deserve to be able to afford a place to call home.”
The political stance of the government to intentionally aim to push home prices lower is certainly unconventional which makes the move all the more fascinating and perhaps illuminates the fragile social state around much of the world. Furthermore, it comes at a time when the BC property market has already slowed to a standstill. Year-to-date, residential sales are down 22.8% compared to the same period last year, while dollar volumes slipped by 22.1% to $49.7 billion.
