The B.C. Speculation Tax Shouldn’t Impact Non-Speculators
Better definitions and protections should be created to prevent non-speculators from paying additional taxes
The B.C. government has recently decided to make much-needed changes to the speculation tax it announced in February. These changes reflect concerns raised by several Canadians both in and outside of the province who would have been unfairly affected by it. Yet, in some ways, the changes don’t go far enough.
The speculation tax is part of a broader set of initiatives by the provincial government to deal with the ongoing housing crisis. It comes at a time when the average price for housing has increased dramatically and affordable rentals are in short supply.
It was created to encourage those with vacant homes to rent them out while deterring investors from buying homes for speculative purposes. The tax will, however, also have unintended consequences for many non-speculators that might be forced to sell their property as a result.
In a recent article in The Globe and Mail, Justine Hunter wrote of a retired couple in Parksville who have been living part-time in Ontario for the past 12 years. The couple would have had to pay an additional $9,400 per year on their property taxes, making it unaffordable for them to continue living there.
With changes to the original provisions, the couple will now avoid the tax. Still, others—like those who own and occupy homes in both the United States and Canada—will not.
In addition to targeting foreign speculators, the tax is designed to affect Canadians from outside of the province, who are thought to be having a significant impact on B.C. housing prices. It will also impact B.C. residents who own homes that are empty for over six months of the year in certain cities. This will have consequences for those unable to afford the significant increase in property and speculation taxes on homes with ever-increasing values, unless they continuously live there.
As the tax is still in its infancy, there is room for further changes, and the government has said that it is making exemptions in an attempt to protect regular homeowners.
At its core, the tax is necessary for dealing with the affordability crisis in cities such as Greater Vancouver, Chilliwack, Mission, Abbotsford, the Capital Regional District, Nanaimo-Lantzville, and Kelowna. It is a sign that more radical steps need to be taken in order to protect the access that Canadians have to stable and affordable homes. But homeowners who are lucky enough to own a second property in B.C. should not be made to suffer the consequences of speculators’ actions.
Better definitions and protections should be put in place to help regular homeowners avoid the tax, especially if they have spent time living in both of their properties, and to target speculators more clearly.
