In the Provincial Governments Budget 2018, the BC government announced that it would be introducing legislation to impose an annual speculation tax. The tax will be effective for the 2018 tax year.
The majority of BC homeowners will be exempt from this tax.
I estimate that 20% of the homes ( and thier owners) in Greater Victoria will be affected by this "tax". Over the years, Albertans and Ontario residents have bought a second home here in Victoria, with a plan to retire here. I thought it would take the form of a tax applied upon the sale of a property – say, if a home is flipped by a non-resident within a certain limited time period. For example, a non-resident (for tax purposes) owner who sells a James Bay home within a year of buying it would have to pay an additional levy on that sale – a levy that would decline on a sliding scale the longer the home is owned. Such a tax would target actual speculators looking for nothing more than a quick flip, who capitalize on the uplift in value in a rising market within a relatively short time frame. That’s what speculation is, after all. That is not what was introduced by the Government.
The speculation tax will target foreign and domestic speculators in BC. These are homeowners who have removed their units from BC’s long-term housing stock – meaning they are not owner-occupied or a qualifying long-term rental property. Satellite families - households with high worldwide income that pay little income tax in BC - will also be captured by the tax. The speculation tax will initially apply to the Metro Vancouver, Fraser Valley, Capital and Nanaimo Regional Districts, and in the municipalities of Kelowna and West Kelowna.
In 2018, the tax rate will be $5 per $1,000 of assessed value. In 2019, the rate will increase to $20 per $1,000 of assessed value.
Specifics of how and when the tax will be collected, are still to be worked out.