The province is releasing data showing that the speculation and vacancy tax is helping create affordable housing.
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Province releases speculation and vacancy tax data
Published 2:38 PST, Fri November 25, 2022
Earlier this week on National Housing Day, the province released data that shows the speculation and vacancy tax (SVT) continues to turn empty units into homes and support the creation of additional affordable housing.
"Our latest data shows the speculation and vacancy tax is encouraging people to use residential units as homes," said Selina Robinson, Minister of Finance. "That's why we have expanded the benefits of the tax to even more communities, so that people have a place to live in the communities they love."
More than $78 million was raised in 2021 through the tax to go back into affordable housing in areas subject to the SVT. Foreign owners and satellite families continue to pay the majority of the tax, with a total of $44.4 million, or almost 57 per cent of total SVT revenues in 2021. In 2021-22, the B.C. government invested $1.1 billion in these SVT-specified areas.
SVT is part of government's 30-point housing plan that includes historic levels of investment in housing in communities throughout the province. In areas where the SVT applies, the province has invested $3.9 billion in housing through the Homes for BC plan since 2018.
"People urgently need housing. We can't allow speculators to drive up prices and we can't leave condos empty during a housing crisis," said Murray Rankin, Attorney General and Minister Responsible for Housing. "That's why we're taking bold steps to increase housing supply. Recent steps include legislation introduced this week to change the Strata Property Act to remove rental bans and age limits in strata buildings, and a new Housing Supply Act that will build upon housing targets in those communities with the greatest needs and highest projected growth."
Analysis of the 2021 data shows the tax continues to encourage people to use their residential properties as their home or as rentals for people. As a result, between 2020 and 2021, nearly 26,000 additional property owners claimed the principal residence exemption because the unit was no longer vacant. This number suggests the SVT is changing property-owner behaviour and increasing long-term housing.
The B.C. government is committed to partnering with local governments to deliver the housing people need. As part of that commitment, each year the province consults with mayors in SVT areas about how the tax is working in their communities. The release of the SVT data marks the start of consultation with mayors this year.
The B.C. government is expanding the SVT in 2023 to include North Cowichan, Duncan, Ladysmith, Lake Cowichan, Lions Bay, and Squamish.
"It's not just the larger urban areas like Vancouver and Victoria that are facing a housing crisis. In smaller and medium-sized communities like North Cowichan, people are struggling with housing affordability," said Rob Douglas, mayor of North Cowichan. "We are glad to see the province expand the speculation and vacancy tax to our community and look forward to seeing the revenue collected from this tax invested in affordable housing projects in our region."
The expansion was announced following the release of independent research that showed the success of the tax over the first three years in areas such as Metro Vancouver and the Capital Region. The analysis showed the tax helped moderate prices for renters and owners and encouraged the return of 20,000 condo units to Metro Vancouver's rental market.
"Every neighbourhood in Victoria needs a continuum of housing, and to deliver that housing, we all have to work together," said Marianne Alto, mayor of Victoria. "That's why we're at the table with the province when it comes to supporting tools like the SVT, sustainable development, and every measure that, at the end of the day, will give more people a home."
In its fourth year, more than 99 per cent of people who live in B.C. were exempt from paying the SVT. The number of British Columbians paying the SVT in 2021 decreased by 4.3 per cent compared to the 2020 tax year, which suggests there are fewer vacant units.
The SVT is part of the province's work to deliver good homes for people in B.C., building on B.C.'s 10-year, $7-billion Homes for BC plan.
To download the technical briefing about the 2021 SVT declaration year: news.gov.bc.ca/files/SVT_technical_briefing_2021_tax_year.pdf.
To download the 2021 SVT declaration data by municipality: news.gov.bc.ca/files/SVT_Detailed_Data_2021_tax_year.pdf.