The government of British Columbia has taken bold new steps in an attempt to tackle housing affordability and speculation crisis.Here’s an overview of the main points:
Speculation Tax
- A speculation tax aimed will now be applied on residential properties for foreign and domestic homeowners who don’t pay income tax in BC.
- The taxable amount will be $5 per $1000 of assessed value initially in 2018. (eg. $500,00 home pays $2500 tax) It will then increase to $20 per $1000 assessed value in 2019 (eg. $500,000 home pays $10,000).
- The tax will extend to Metro Vancouver, Fraser Valley, Island and Nanaimo, and Kelowna areas.
- beneficial ownership will be disclosed and tracked
- further transparency in real estate transactions and enforcement
- 6 billion will be invested over the next 10 years to create 114,000 affordable homes.
- better tracking of pre-sale condo assignments by developers
Effective immediately the property transfer tax on residential properties will increase from 3 percent to 5 percent.
Foreign Buyer Tax
- The foreign buyer tax will be increased from 15 percent to 20 percent starting effective immediately.
- The tax will extended to Nanaimo and the Island, Fraser Valley, and the Central Okanagan areas.