The B.C. Green Party, which has been vocally opposed to the NDP’s speculation tax, has reluctantly agreed to support the legislation after three changes are made, the parties announced October 18.
The Ministry of Finance said it will support the Green’s three amendments “in the spirit of compromise,” even though the finance minister made it clear she only agrees with two of them.
The key change to the legislation is the third amendment, that out-of-province Canadians who own B.C. homes in the affected areas pay the same 0.5 per cent rate as B.C.-resident owners, not the one per cent set out in the existing legislation.
Andrew Weaver, B.C. Green Party leader, said, “[A] key concern of mine was that Canadians should be treated equally. We are one country and even if they don’t pay income tax in B.C., Canadians pay federal taxes that benefit our communities. The third amendment was an area of compromise and I am pleased that it will lessen the impact for Canadian homeowners, while keeping other critical provisions of the bill intact.”
The first two changes, which the NDP said it agreed with, are:
• for there to be an annual review between the Ministry of Finance and the mayors in the affected municipalities to see how the tax has affected their regions; and
• for all revenues from the tax to be spent on affordable housing projects in the affected regions: Nanaimo-Lantzville, the Capital Regional District, Metro Vancouver, the Fraser Valley and Kelowna-West Kelowna. The statement said, “This will ensure residents of those areas will be able to see the benefits of the tax in their own communities.”
“While we strongly support the intent of the first two amendments, we are of the view that the third amendment lessens protections against out-of-province speculative investment,” said finance minister Carol James. “We believe it is fair to ask those who do not pay income tax in B.C. to pay their fair share. But in the spirit of compromise, we will support this amendment.”
Weaver said, ““While this is still not the approach I would have taken, these amendments will improve the bill and will mitigate many of the key issues I have identified. The housing crisis is British Columbians’ number one concern and our caucus is committed to working with government to address the role that speculation has played.
"One of my key issues with this tax is that it was a blunt instrument applied to communities with unique circumstances. My amendments to include local governments in an annual meeting to review the tax, and to dedicate any funds raised from this tax to affordable housing in their communities, strike a far better balance.”
The newly renamed speculation and vacancy tax still has to pass legislation, but is likely a done deal now that it has the Green Party's backing.
All homeowners in the affected areas will have to complete a form to declare their property's use, whether as a primary residence, a rental home or an empty home (in the City of Vancouver, this will be in addition to the Empty Homes Tax declaration form).
Canadian income-tax payers who own an unoccupied second or investment home in the affected areas, as of December 31 of each tax year, will have to pay 0.5 per cent of its assessed value per year. Overseas resident owners will have to pay two per cent of the value per year.
Glacier Media Real Estate