On March 26, 2018, the provincial government announced it is making some changes to the speculation tax first introduced in February as part of the BC Budget 2018.
- The new Speculation Tax will now be limited to Nanaimo and Greater Victoria, exempting Parksville, Qualicum Beach, the Gulf Islands and Juan de Fuca areas
- The original Fraser Valley location will be reduced to Mission, Abbotsford and Chilliwack, exempting Kent, Hope and Harrison Hot Springs
- Bowen Island and Whistler which is suffering a rental crisis are exempted.
The government unveiled three rate structures for the tax as well:
- 2% full rate for foreign property owners
- 1% for out-of-province owners
- 0.5% for British Columbians who own multiple properties but don’t rent them out for at least 6 months of the year.
Read more about BC Speculation Tax here
BC’s Speculation Tax
- It will be levied on empty homes owned by people who do not pay income tax in the province.
- It is an annual property tax.
- It will be applied in Metro Vancouver, the Fraser Valley, Kelowna, Victoria and Nanaimo.
Already people are saying the speculation tax is more like the empty homes tax. It does not really affect people flipping (buying and selling homes for profit in a short period of time) but people with vacation homes, satellite families or snow birds will be affected.
In an article by First National Financial LP, BCsays it does not know if the plan will actually make housing more affordable but it does expect to collect $1.3 billion in new revenue over the next three years. Read more here.
More articles about the Speculation Tax:
Foreign Buyers Tax
- The foreign buyers tax that was put in place in 2016 will be increased from 15% to 20%.
- It will be expanded to apply in Metro Vancouver, the Fraser Valley, Kelowna, Victoria and Nanaimo.
Property Transfer Tax Changes
The property transfer tax rate is:
- 1% on the first $200,000,
- 2% on the portion of the fair market value greater than $200,000 and up to and including $2,000,000,
- 3% on the portion of the fair market value greater than $2,000,000, and
- if the property is residential, a further 2% on the portion of the fair market value greater than $3,000,000 (effective February 21, 2018).
You can find information about these changes at gov.bc.ca/propertytransfertax