The social democratic NDP government of British Columbia is expanding the application of a Speculation and Vacancy Tax (SVT) that is widely seen as successful in addressing an urgent need for affordable housing. The Green Party of BC wonders why they do not go further and have the tax imposed in even more areas of the province.
The NDP government, in agreement with the Greens, first introduced the SVT in 2018, to fight speculation in the housing market and turn empty residential units into badly needed homes. At the time, the NDP needed the support of the Green Party to form a minority government.
The SVT is an annual tax that is imposed on vacant residential property, in the amount of 0.5% of the assessed value of homes owned by Canadian citizens or permanent residents and 2% of the value of foreign owned property. The province says that 99 per cent of British Columbians are not subject to the tax
This tax was the first of its kind in Canada and is unique in that it applies to specific regions, primarily urban areas with near zero vacancy rates, and not the entire province. A study commissioned by the government, and released in June of 2022, credits the tax with bringing approximately 20,000 new condos to the market of Metropolitan Vancouver. Over the first three years of the program the government also raised $231 million in SVT revenues. All revenue from the tax is to be spent on affordable housing in the district from where it was collected.
BC Finance Minister Selina Robinson boasts that the tax is working as intended. In her report she describes the problem: “By 2017, the housing crisis in B.C. had been spiralling out of control for many years. Speculation drove up housing prices, pushed rental properties off the market, and left homes vacant.” She now credits the SVT with turning “thousands of empty units into homes” and, by reducing speculation, keeping “prices lower than they would have been without the tax.”
The NDP, which now forms a majority government, is expanding the regions covered by the tax. The SVT currently applies in the Lower Mainland, southern Vancouver Island, West Kelowna, Nanaimo and the District of Lantzville. Starting in January of 2023, the tax will apply to Lions Bay and Squamish, as well as the Vancouver Island Communities of North Cowichan, Duncan, Ladysmith, and Lake Cowichan.
Robinson explains: “People in these communities have been vocal. They’ve been vocal about the intense housing pressures that they are facing, including speculation and near zero vacancy rates. This expansion will help prevent speculation from moving from one community to another in a region.” Six more municipalities are to be added in 2024.
The Green Party supports the expansion. Green Party leader, and MLA for Cowichan Valley, Sonia Furstenau states: “I am pleased to see an expansion of the Speculation and Vacancy Tax as B.C. struggles with the intensifying housing crisis.” She adds that, “the data on the impact of this tax is so far encouraging.” However, the Party wonders why the government does not go further and faster in bringing this successful tax to more regions of the province. Green Party MLA for Saanich North, Adam Olsen, is disappointed that the Southern Gulf Islands are not included in the list of municipalities to be covered and will be asking Robinson to explain.
Robinson has not ruled out further expansion, advising that: “We’re monitoring this very closely and are incrementally looking at how to best use this tax”. However, Furstenau asserts: “Housing is a human right….We need bold action, not incrementalism, to address a crisis.”