WATCH: Announced in February’s budget, the speculation tax has put many people on edge, wondering if the cost for their small family cabin on one of the Gulf Islands will cost thousands more per year. Today, B.C. Finance Minister Carole James put some of those fears to rest, announcing a lengthy list of exemptions. April Lawrence has the details.
Parksville, Qualicum Beach, the Gulf Islands and Juan de Fuca are now exempt from the province’s speculation tax, B.C. Finance Minister Carole James said Monday.
According to James, more than 99 per cent of British Columbians will not pay the speculation tax, which was first announced in February’s budget.
“Our government wants to make sure people who live and work here are able to find and afford a good home in their community,” said James.
“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 the speculation tax is for 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.
The speculation tax will still apply to Metro Vancouver, the Capital Regional District (excluding the Gulf Islands and Juan de Fuca), Kelowna, West Kelowna, Nanaimo, Lantzville, Abbotsford, Chilliwack and Mission.
The Regional District of Nanaimo is mostly exempt except for the District of Lantzville and the City of Nanaimo.
In 2018, the tax rate for all properties subject to the speculation tax will be 0.5 per cent. In 2019 and the years after, the tax rates will be two per cent for foreign investors and satellite families, one per cent for Canadian citizens and permanent residents who do not live in British Columbia and 0.5 per cent for British Columbians who are Canadian citizens or permanent residents (and are not members of a satellite families.
There are exemptions for British Columbians’ primary residences and for long-term rentals, which are properties that are rented for at least six months.
British Columbians with vacant second homes will be eligible for a non-refundable tax credit that is immediately applied against the speculation tax. This credit will offset a total of $2,000 in speculation tax payable. The credit is to make sure British Columbians do not pay tax on a second home valued up to $400,000.
There will also be exemptions for homeowners facing special circumstances. Those include the owner or tenant is undergoing medical care or residing in a hospital, long-term care or a supportive-care facility, owner or tenant is temporarily absent for work purposes or the registered owner is deceased, and the estate is in the process of being administered.
The B.C. government will be introducing legislation this fall to enact the tax.
Properties in B.C.’s southern Gulf Islands that aren’t rented out or a person’s primary residence are now exempt from the speculation tax. (Kristin Nelson/CBC).
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