The Government of British Columbia has just released a 10-year, 30-point plan for housing affordability in the province with the aim of stabilizing the market, cracking down on tax fraud, closing tax loopholes, building the homes people need, improving security for renters, and building partnerships for affordability.
The centerpiece of this plan is to stabilize the housing market with a new speculator tax on absentee property owners. This tax measure is designed to push down the price of housing by targeting vacant homes owned by out-of-province investors. In 2018, the tax rate will be $5 per $1,000 of assessed value. In 2019 and beyond, it will be $20 per $1,000 of assessed value. This new levy is expected to apply to about 15,000 residential properties in Metro Vancouver, the Fraser Valley, Victoria, Nanaimo and Kelowna. Here are some of the other highlights of this extensive plan:
- The province will be increasing the foreign buyers’ tax from 15% to 20% and expanding it to cover Victoria, Nanaimo, the Fraser Valley and Central Okanagan.
- Homes worth more than $3 million will see their property transfer taxes increase from 3% to 5%,
- A new database will be created for pre-sale condo assignment, which will allow federal and provincial tax authorities to ensure tax is paid on sales.
There’ll be policy changes on the supply-side as well:
- Additional investments in affordable housing: over $6 billion for 114,000 affordable homes, 14,000 rental units for the “missing middle,” and additional units for homelessness, women fleeing violence, students and Indigenous people.
- Property tax exemptions for purpose-built rentals and finding more government incentives in order to encourage more rentals
- Increasing density for affordable housing around transit stations
- Commit $116 million over 3 years to bolster programs that make housing more affordable to low income seniors and families who rent
The government expects these measures (curbing demand, reducing tax evasion, closing real estate loopholes and targeting property owners who don’t pay taxes in BC) will generate $208 million this year, and $321 million going forward. The details of this plan can be found here – http://bcbudget.gov.bc.ca/2018/homesbc/2018_Homes_For_BC.pdf – along with detailed proposals that the government will use to put a dent in BC’s housing crisis. We’ll be following this issue over the next few weeks; be sure to visit the blog to find out more!