Primary data on speculation and vacancy tax (SVT) declarations show that foreign buyers, satellite families, and those with vacant homes are helping to fatten B.C.'s treasury.
Finance Minister Carole James said in a statement that the SVT contributes $115 million in the 2018-19 fiscal year, while more than 99.8 percent of British Columbians are exempted from the tax.
The revenue is much higher than the $87 million the government had anticipated for the last fiscal year.
“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 the province,” James said. “We are tackling our province’s housing crisis and this tax is a key part of our 30-point plan to root out speculation and bring moderation to the housing market.”
According to data released by the government, foreign owners, satellite families, and Canadians living outside B.C. make up approximately 80 percent of those paying speculation taxes.
On average, homes captured by the tax are 46 percent more expensive than homes exempt from SVT in the taxable areas.
“Homes should be for people, not speculative investment,” James said.
As of July 4, more than 12,029 homeowners—4,585 foreign owners, 3,241 satellite families, 1,555 Canadians living outside of B.C., 2,410 B.C. residents, and 238 other property owners—are paying the speculation and vacancy tax.
However, the ministry of finance said almost 23,000 people have not filed their declaration or exemption forms yet.
Foreign owners and satellite families pay two percent of the vacant home's value per year, whereas Canadian citizens and permanent residents who are not part of satellite families are charged 0.5 percent per year.
The finance minister is planning to meet with mayors of cities where speculation and vacancy tax is applied to share data and analysis about it.
As part of its plan to restore housing affordability in B.C., the provincial government is targeting foreign and domestic speculators who own homes in the province but do not pay taxes here.
The government said that the SVT will help turn empty homes into housing and raise revenue to support affordable housing in communities where the tax applies.
B.C. government introduced speculation and vacancy tax in 2018, aiming to crack down on foreign-owned homes in the provinces that are left empty.
If homeowners rent their properties at least six months of the year, they can be exempted from paying SVT.
The tax applies to cities in Metro Vancouver (excluding Bowen Island, Lions Bay, and Electoral A), Abbotsford, Chilliwack, Mission, Greater Victoria, Nanaimo, Kelowna, and West Kelowna.