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Province says speculation tax brought in $58M in 2018 as meetings with mayors on tax kick off

The provincial government has just released the numbers on revenue collected from the speculation and vacancy tax. Neetu Garcha explains.

The provincial government says the Speculation and Vacancy Tax is “contributing to the ongoing moderation” of the housing market, but struggles to produce the numbers to prove it.

Finance Minister Carole James is meeting with mayors on Thursday from jurisdictions where the tax was introduced.

According to data provided by the province, 99.9 per cent of British Columbians are exempt from the tax.

READ MORE: B.C. home sales ‘continue to recover,’ says industry association after August bump

Revenue from the tax for the 2018 calendar totaled $58 million and that money will be cycled back into addressing affordability, said James.

“One of the real frustrations of government has been the lack of consistent data on housing to address this issue. This was not paid attention [to] by the previous government and part of the collection of information will help us build that data,” James said.

“One measure is not going to fix it.”

Based on the first quarter fiscal update, the province has see home sales across the province drop for the third straight year. Based on the first three months of the year, home sales are down 16.1 per cent and average home sale prices are down 5.6 per cent.

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WATCH (Aired: July 11, 2019): New speculation and vacancy tax numbers released

New speculation and vacancy tax numbers released
New speculation and vacancy tax numbers released

But while housing prices are down, the province did not see any significant increase in vacancy rates for 2018. The province is noting the rates have improved slightly and more data will be available in October.

The Speculation Tax has been hugely problematic for some local mayors.

The mayors of Oak Bay, Langford, West Kelowna and Kelowna signed a letter last year asking the province to exempt their communities.

Following the letter, Green Party Leader Andrew Weaver insisted mayors have the ability to exempt themselves. The back and forth eventually led to the province agreeing on annual meetings with mayors on the tax.

READ MORE: Municipal leaders put pressure on provincial government to change speculation tax

“It’s important to note the tax encourages people to rent out their homes, to not leave them vacant,” James said.

“We are going to make any improvements we feel we need to make. I’m not going to second guess what the mayors bring forward.”

On the campaign trail Thursday, federal Liberal Leader Justin Trudeau pledged a national one per cent tax on residential properties owned by non-Canadians who do not live in Canada. If Trudeau is re-elected the tax would apply on top of provincial measures like B.C.’s Speculation Tax.

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As of last week there were 11,783 property owners paying the Speculation Tax. A bulk of those are the 4,621 foreign owners and 3,060 satellite families.