More homes on Vancouver Island are now subject to the speculation tax
The mayors of Duncan, Ladysmith, North Cowichan and Lake Cowichan endorsed the province’s announcement.
The expansion of the speculation and vacancy tax to six new communities is welcomed by the mayors of four Island communities struggling with a housing affordability crisis.
The mayors of Duncan, Ladysmith, North Cowichan and Lake Cowichan on Wednesday approved the province’s announcement that certain empty homes in their communities would be subject to the tax starting in January.
“I think it was necessary. I think seeing the disproportionate upward pressure on [house] reduced pricing and availability without having that tax on speculation, it’s the right move,” Ladysmith Mayor Aaron Stone said.
The tax, introduced in the February 2018 budget, was created to reduce the number of empty homes in the province and help address the shortage of affordable housing in British Columbia by encouraging owners of vacant units to rent them or to sell them.
The tax rate is 2% of the assessed value of a property for foreign owners and satellite families and 0.5% for Canadian citizens or permanent residents.
Owners are exempt from the tax if it is their principal residence, they rent it out for at least six months of the year, they are disabled, the property has just been inherited, it is is valued at less than $150,000 or that a person was absent and vacant for medical reasons, residential care, work or marital separation.
Stone and North Cowichan Mayor Al Siebring were among a group calling on the province to make the move because their analyzes showed that the proximity of the Capital Regional District to Nanaimo, where the tax on speculation already applied, had a real effect on housing. market in their communities.
“It was putting additional pressure on the Cowichan area, where there was already an extreme lack of affordable housing,” Stone said. “It’s a crisis all over Vancouver Island, especially south of Campbell River.
Siebring noted that the percentage increase in home prices in the Cowichan area exceeded increases in Victoria and Nanaimo.
“Our values have gone up faster and they both have the specific tax,” Siebring said, noting their message to the finance minister was that the tax appears to be working to help temper rising house prices in major cities. , so why not expand to include smaller ones?
“I think it’s just going to level the playing field in the long run,” Siebring said, adding that it sends the message that if you’re thinking of buying a house on southern Vancouver Island, you won’t be able to. let her rest. empty.
“If you want to come here part-time and live, that’s fine, but [if it’s empty] you’re going to have to rent the place. You have to provide housing for people. You can’t let it stay there.
According to the province, less than one per cent of British Columbians have to pay the tax, which largely applies to foreign owners, satellite families (where the majority of their worldwide income is not declared on a return of Canadian income), Canadians outside of British Columbia and other non-resident owners of British Columbia.
In its announcement on Wednesday that the tax would also be extended to Squamish and Lions Bay, the province said an independent review of the tax concluded it was helping to keep housing prices and rents below this level. that they would have been.
The province says the tax has encouraged about 20,000 condo units to return to the long-term rental market in Vancouver.
“In 2018, we introduced the historic Speculation and Vacancy Tax which targeted speculators and quickly helped turn thousands of empty units into housing for people,” Finance Minister Selina said. Robinson.
Sonia Furstenau, leader of the British Columbia Greens and MP for Cowichan Valley, said she was pleased to see the expansion. “Addressing this crisis requires a variety of policies targeted at both supply and demand, and the data on the impact of this tax so far is encouraging,” she said. .
Furstenau added, however, that the tax is not a “silver bullet” and that the province needs to increase the supply of housing, especially nonprofit and co-op housing, and encourage municipalities to adopt zoning to higher densities.
Green MP Adam Olsen added he was disappointed the southern Gulf islands were not included in the expansion.
Duncan Mayor Michelle Staples said the expansion will help increase the number of housing units available in the area, but does not appear to apply to unincorporated areas which make up the vast majority of homes in use for recreation in the area.
Lake Cowichan Mayor Bob Day said as a destination community with many redeveloped properties to be rented out to vacationers, they need all the help they can get when it comes to housing supply.
He said Airbnb’s effect on housing stock has meant many local businesses are struggling to find workers, who have been forced out of the area. “There’s not much for the low-income people in the area.”
Siebring has the same problem in North Cowichan, noting that many people live in RVs, while some well-paid executives live in Airbnb units because they couldn’t find anything to buy.
“It’s definitely a housing crisis and that’s not an exaggeration,” he said.
The expansion takes effect on January 1.