The B.C. government says it expects to collect $115 million from the first year of the speculation and vacancy tax, nearly all of which is coming from homeowners living outside the province.
The Ministry of Finance said Thursday all of that revenue will go towards new housing projects across B.C., and that less than 0.2 per cent of British Columbians had to pay this year.
“We wanted to get rid of speculators and people who don’t pay taxes in British Columbia, and they’ll now be contributing,” Finance Minister Carole James said.
“We feel this is moving in the direction it needs to.”
WATCH: (Aired March 29) Speculation tax exemption deadline looms
James also noted nearly half of the homes subject to the tax — 46 per cent — were more expensive than the vast majority of homes found to be exempt.
“We think this is a positive sign that the tax is targeting people where it should,” she said. “These are higher-than-average valued homes. We’re looking at $1.6 million, for example, which is a much higher price in the areas impacted by the tax.”
Declaration forms for the tax, which applies a 0.5 per cent additional levy on the total value of applicable properties, were sent out to 1.6 million homeowners earlier this year.
James said the province has collected 98 per cent of completed declarations.
The completed forms showed 4,585 foreign owners and 3,241 satellite families will have to pay the tax as of July 4, making up 80 per cent of the total tax base.
WATCH: (Aired March 5) Village of Belcarra asks for speculation tax exemption
Those people will face a higher tax rate of 2 per cent in 2019 and in all future years, according to the legislation passed last year.
Canadian citizens and B.C. residents subject to the tax will stay with the 0.5 per cent rate.
Homeowners subject to the tax had until July 2 to make their payments.
The revenue announcement comes as home sales continue to tumble in B.C.
The Greater Vancouver Real Estate Board said this past June saw the lowest sales since the year 2000, while the benchmark price for all homes fell below $1 million for the first time in two years.
Luxury home sales are also continuing to fall in Vancouver, according to Sotheby’s International Realty Canada.
James said this is proof the tax is working, and isn’t concerned about a projected loss of revenue from the property transfer tax as a result, adding it was built into the most recent budget.
“Dealing with this housing crisis, we knew there would be an area that would be impacted, and that’s already been reduced in the budget,” she said.