BC NDP plan increase to the speculation and vacancy tax
After releasing their full platform yesterday, including new housing measures, the BC NDP released more details today, specifically regarding their promise to increase the Speculation and Vacancy Tax (SVT).
When the SVT was first introduced for the 2018 tax year, the tax rate was set at 0.5% of the property’s assessed value for all properties subject to the tax. Shortly after, ever since the 2019 tax year, the rate was set at 2% for foreign owners and untaxed worldwide earners and 0.5% for Canadian citizens or permanent residents.
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David Eby announced today that if the BC NDP were to form government, they would further increase the SVT to 3% for foreign owners and 1% for Canadian citizens or permanent residents, starting in 2025.
For example, a 3% tax on a vacant property worth $2 million would result in a $60,000 tax bill.
In a release, the party calls the SVT a “popular BC NDP tax measure” and asserts John Rustad’s Conservative Party of BC would axe the SVT.
“Letting wealthy investors buy homes and leave them empty is part of what got us into the housing crisis in the first place. Going back to that kind of thinking would only make things worse,” said Eby in a statement.
“If you’re struggling with housing costs, our plan will crack down on those looking to make a quick buck to get even more homes back on the market for people.”
A previous report commissioned by the provincial government estimated the SVT helped catalyze the conversion of about 20,000 condominium homes within Metro Vancouver into unsecured rental homes.
The tax revenue collected supports affordable housing projects. The provincial government’s latest budget forecasts $90 million for each of the 2023/2024 and 2024/2025 fiscal years and $94 million for 2025/2026 and 2026/2027.
According to the provincial government, 99% of BC residents do not pay the SVT.
It should be emphasized that the SVT is separate from the additional Empty Homes Tax (EHT) paid by City of Vancouver households. In 2023, Vancouver City Council decided not to further increase the EHT.
The BC NDP also asserts that the BC Conservatives would repeal the recently implemented short-term rental regulations. These regulations are a measure to improve the long-term rental housing market for people who live, work, and study in their communities, but they have been deemed detrimental to tourism.
The provincial general election is scheduled for October 19, 2024.