B.C.’S speculation and vacancy tax (SVT) helped make homes more affordable in the SVT areas of the province, based on independent analysis by Tsur Somerville and Jake Wetzel.
“Homes should be homes, not safety deposit boxes,” said Selina Robinson, Minister of Finance, on Thursday. “Two leading researchers in housing affordability have highlighted how the SVT turned thousands of empty units into homes for people and kept prices lower than they would have been without the tax. The tax is working to keep homes available in the middle of a housing crisis instead of them being left empty by speculators.”
The first comprehensive analysis of the SVT (Review Report) since it was launched in 2018 shows that, prior to the pandemic, it was helping improve home prices for renters and owners. It also confirms that the tax, specifically the 2% tax rate for foreign owners and satellite families, encouraged the return of approximately 20,000 condo units to the long-term rental market in Metro Vancouver.
The review report suggests areas where government could build on the benefits of the tax, including the possible expansion of taxable areas, and ways to encourage more people to get housing properties back onto the market or use them as homes.
“What is before us is a generational challenge and while some would try and eliminate the speculation tax and give a tax break to those who leave homes empty. We’re not turning back,” Robinson said. “We have a lot more work to do, and I’m pleased to see recommendations for how we can improve this tax and turn even more empty properties into homes for people.”
Those who own vacant properties in taxable areas of B.C., including out-of-province owners and foreign owners, pay the tax. More than 99% of B.C. residents do not pay the SVT.
All revenue helps fund affordable housing developments in the five taxable regions. For the 2020 calendar year, the SVT raised $81 million, bringing the three-year total of revenue generated to $231 million. During this same three-year period, the Province invested nearly $2.8 billion in housing in the five SVT regions.
* Through the Homes for B.C. plan that includes the SVT, the B.C. government is making the largest investment in housing in the province’s history, which is more than $6 billion over 10 years.
* Since introducing the plan, the Province has funded nearly 34,000 more affordable new homes in more than 100 communities.
* An SVT Review Report must be produced and made public every five years.
* The B.C. government also released an annual consultation report for the 2020 SVT tax year.
* The annual report follows each SVT tax year and consultation with mayors from areas where the tax applies.
* Both reports are required under the Speculation and Vacancy Tax Act.