Whereas housing availability and affordability impacts the health, social and economic well-being of communities; And whereas the provincial speculation and vacancy tax generates revenues to support affordable housing initiatives in the areas where the tax is collected, but is currently only applicable in large urban centres: Therefore be it resolved that UBCM ask the Province to consult with local governments on an evaluation of the Speculation and Vacancy Tax Act including a review of the specified areas and the impact on areas adjacent to the designated taxable regions.
Ministry of Finance The Speculation and Vacancy Tax SVT was introduced as part of Governments 30-point housing plan in November 2018. The SVT targets those who are holding their properties vacant, putting pressure on already low vacancy rates and housing supply levels. The SVT also targets foreign owners and satellite families who do not pay their share of income taxes in our province but enjoy British Columbias services and high quality of life. The SVT is designed to prevent housing speculation and help turn vacant and underutilized properties into homes for people who live and work in BC. The Speculation and Vacancy Tax Act SVTA requires the Minister of Finance to conduct annual consultation with the mayors of all municipalities covered by the tax. These consultations provide mayors with an opportunity to discuss how the tax is affecting their communities and allow the Minister to release SVT data for each municipality. The SVTA also requires that on or before December 31, 2021, and at least once every five years after that, the government must initiate a review of the Act and regulations and make public a report of the review. The report must take into account the effectiveness of the legislation having regard to housing affordability, including vacancy rates, sale prices of residential property, rents for residential property and other relevant factors. The first report was released in June 2022, which shows that the tax is working as intended. When choosing where to initially apply the SVT, government focused on urban centres with low vacancy rates and affordability challenges in which house prices and rents exceeded local incomes. One of the recommendations from the review was to examine whether the tax should be expanded to new areas. The Province conducted this review and examined a range of factors including vacancy rates, affordability challenges, rents, local incomes, the areas close proximity to the existing SVT areas and whether the area was facing acute housing pressures related to speculation and empty homes. The Province also took into account input from local communities. As a result of the review, the Province has expanded the SVT to six new municipalities: North Cowichan, Duncan, Ladysmith, Lake Cowichan, Lions Bay and Squamish, effective January 2023. The Province has received requests from areas outside the SVT regions that are interested in being subject to the tax. The Province must contemplate any changes to the SVT at the provincial level and consider taxation at other levels of government, such as the federal governments implementation of the Underused Housing Tax in 2022 and introduction of a two-year foreign ownership ban in 2023. Government is carefully monitoring housing data moving forward to ensure the desired results of the SVT are achieved and will continue to consult with local governments on impacts and implementation.