B.C. makes changes to speculation tax after criticism from homeowners

VICTORIA – British Columbia is trying to target urban areas with changes to its proposed tax on property speculation after some municipalities demanded exemptions and the Opposition accused the New Democrats of grabbing family assets.

Finance Minister Carol James is also adjusting the tax rate since she first announced details in the budget last month.

The changes would create a number of exemptions and shift which areas of the province would be covered by the tax.

That means it would apply to properties in Metro Vancouver, Kelowna, West Kelowna, Nanaimo-Lantzville, Abbotsford, Chilliwack, Mission and the Capital Regional District around Victoria on southern Vancouver Island, excluding the Gulf Islands and Juan de Fuca.

James says the tax, which is expected to be introduced in legislation this fall, would not hit people with cabins or vacation homes in rural areas, islands or smaller centres outside of the designated urban zones.

James says the proposed tax rates for Canadian citizens or permanent residents not living in B.C. would be cut from two per cent of a property's assessed value to one per cent.

But she says the proposed tax would remain at two per cent of assessed property value for foreign investors and extended family members.

James says the tax is part of the government's effort to improve housing affordability for thousands of people, including seniors living in their vehicles and young professionals who are turning down jobs in B.C. because they can't find a place to live.

"Our government wants to make sure people who live and work here are able to find and afford a good home in their community," James says in a news release.

"The speculation tax focuses on people who are treating our housing market like a stock market."

She says people in smaller communities and those with cottages will not pay the tax.

"People with second homes outside of high-cost, designated urban areas will not pay the tax. We are going after speculators who are clearly taking advantage of the market, leaving homes vacant and driving up prices."