British Columbia is expanding the tax it created to clamp down on real estate speculation and ensure homes in rental-strapped communities don’t sit empty.
A statement from the Ministry of Finance says the Speculation and Vacancy Tax now includes the municipalities of North Cowichan, Duncan, Ladysmith, Lake Cowichan, Lions Bay and Squamish.
Starting early next year, homeowners in those areas will join owners in 40 other B.C. cities, districts and towns who are required to declare how their property was used in 2023.
The statement says 99 per cent of people who live in B.C., can expect to be exempt for the 2023 tax year, but homeowners in the new municipalities, along with those already covered by the tax, must make formal declarations in the new year.
Failure to make an accurate declaration can lead to a penalty amounting to between half a per cent and two per cent of the property’s total value, depending on whether the claimant is a Canadian citizen or a foreign owner.
The tax, in place since 2018, covers most residential properties in the Metro Vancouver and Capital regional districts, the districts of Mission and Lantzville and the cities of Abbotsford, Chilliwack, Kelowna, West Kelowna and Nanaimo.
Funds raised are returned to the areas where the tax applies, the ministry said.
The statement shows more than $313 million has been raised since 2018, with the money used to build new, more affordable types of housing.
Finance Minister Katrine Conroy said the tax was being expanded to ensure homes are available.
“People in our province expect housing to be used as homes, not investments for speculators,” Conroy said in the statement.
“The speculation and vacancy tax is making sure homes are available for people, not left empty,” she said.
Ministry data show the measure helped turn approximately 20,000 empty condos into homes in Metro Vancouver and it says expansion of the tax is anticipated to bring more homes to communities struggling with low vacancy rates.