The government had long promised it would take action on housing affordability in this year's budget, and have announced some unpopular tax changes to curb speculation and decrease demand in the market, including:
1. A new, province wide "speculation tax,"
The new speculation tax is focused on vacant homes, but also affects anyone who does not pay taxes in the province. The tax will be two per cent of the assessed value of properties in 2019 for the Lower Mainland, Nanaimo, Kelowna and Victoria's Capital Regional District. Pender Island falls under the latter jurisdiction.
Here is an example of how it affects those who do not live in the province of BC: Mark and Debra Hunter bought their one-bedroom home on Pender Island in 2012 for $211,000. Their annual property tax is currently $1,800 dollars. With the government's newly imposed tax increase, he said it will balloon to nearly $9,000. "They've enclosed the fine so that it creates financial hardship on any owner that isn't a B.C. resident," said Debra. "By doing that they're forcing people to sell. So essentially it's a deportation policy of financially ruining people so they have to sell their properties."
2. An increase to the foreign buyers tax from 15 to 20 per cent
and the expansion of the tax to properties in other major municipal areas in B.C. outside Metro Vancouver.
3. An increase in the property transfer tax from three per cent to five per cent for homes worth more than $3 million.
The government says the full suite of housing measures will be in place by the beginning of next year.
With the revenue it's forecasting, the government is planning to spend $1.6 billion in new housing units — all part of a 30-point detailed housing plan it unveiled as part of the budget.
"What we are looking to do is moderate the market," said Finance Minister Carole James, "We're taking some bold measures, there's no question."
Kelowna and West Kelowna are none to happy.
The harshest comments came from Kelowna Councillor Rick DeJong who said the city, like the public, was blindsided. He called it heavy-handed and a critical issue.
"How the provincial government can do something that impacts us so greatly without even having the courtesy to have discussion with us is beyond me. It's just disgusting," said deJong.
Kelowna Mayor Colin Basran says he wishes the province had consulted him or even provided a warning about the new speculation tax the B.C. government announced in its 2018 budget.
"It would have been nice," Basran said, adding the lack of notice and consultation on the new measure caused fears in his community and he wants answers.
"What we're hearing right now in the community is there's a lot of concern," he said. "This may have some very dire unintended consequences.
"We need to take some time and make sure we get this right."
Of course there is a positive side, and is the reason why the tax was introduced. For those residents who live in the major areas of BC like Kelowna, it could increase in the number of homes available this summer, due to the outsiders having to sell to avoid the new tax which starts early 2019.
The goal of the NDP is to try and find ways to make housing more affordable. The way to do that is to increase inventory. That’s the hope anyway. How it all plays out remains to be seen.
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