B.C.’s new speculation tax funnels $115 million into affordable housing

VICTORIA – The British Columbia government says its new speculation and vacancy tax has pumped $115 million into a fund to create more affordable housing.

The tax was launched this year in several regions as part of a 30-point initiative to improve housing affordability and increase the availability of rental properties.

The Finance Ministry says in a news release that foreign owners, satellite families and those with vacant homes make up approximately 80 per cent of those assessed the tax.

Of the 12,029 affected owners, ministry information shows 4,585 are foreign owners, just over 1,500 are Canadians living outside the province and 2,410 are B.C. residents.

Over 3,200 so-called satellite families, or families that report most of their income outside of Canada, must also pay the tax applied at 0.5 per cent of assessed value this year, climbing to two per cent for foreign owners and satellite families next year.

On average, the ministry says homes captured by the tax are 46 per cent more expensive than homes that were exempted in the taxable areas.

Finance Minister Carole James says funds from the assessment will help tackle the province's housing crisis.

"The speculation and vacancy tax was designed to make sure foreign owners, satellite families and people who use local services without paying income tax in B.C. contribute to the quality of life we all enjoy in this province," James says in the release.

James says she'll further analyse the tax when she meets in September with mayors from the municipalities where it is applied.

Approximately 1.6-million residential property owners in Greater Victoria, Metro Vancouver, Abbotsford, Mission, Chilliwack, Kelowna, West Kelowna, Nanaimo and Lantzville were required to file a tax declaration notice by March 31.

The ministry says 99.8 per cent of British Columbians are exempt from the tax and those who aren't were required to submit their payments by July 2.