How The BC Budget Affects Your Home
The B.C. government just announced a major bump in funding for affordable housing and a vow to crack down on fraud and close loopholes. It was part of a broader 10-year plan that called for 114,000 affordable homes. Housing affordability advocates largely applauded the measures.
The NDP’s 30-point housing plan aims to help the housing market and curb demand from people who pay no income tax in British Columbia and buy houses they do not live in or rent out.
The government will also introduce tax measures designed to push down the price of housing by targeting vacant homes owned by out-of-province investors. It would create a new tax on people who own empty homes but pay no income taxes in B.C., expand the current foreign buyers’ tax, and cut a loan program for first-time buyers.
This firmly breaks away from the direction set during 16 years of BC Liberal government. Additional tax revenue will pump an extra $2-billion into the government for efforts to tackle B.C.’s affordability issues.
There will also be a new levy, which the government calls a speculation tax and is expected to apply to about 15,000 residential properties in Metro Vancouver, the Fraser Valley, the regions of Victoria and Nanaimo on Vancouver Island, and Kelowna in the province’s interior.
The tax rate, charged on a property’s assessed value, will be 0.5 percent in 2018, and then 2 percent in the following years. As a result, an overseas owner, for example, of a $5-million home in West Vancouver would pay $100,000 each year.
The budget of course also addressed the Foreign Buyers tax. The current tax on the purchase of a home by a foreign buyer will rise to 20 percent and will be expanded to communities outside Metro Vancouver, including the Fraser Valley, Nanaimo, the Central Okanagan and Victoria.
The budget also increases taxes on homes worth more than $3-million.
The budget, which projects a surplus of $219-million, includes other higher taxes on high-end housing and luxury cars and boosts spending by more than $1-billion to provide subsidies for families, new housing investments, and other social programs.
Highlights of the Housing budget
- $259 million for new student housing beds
- Crackdown on tax fraud and closing loopholes
- Security for renters by expanding the Rental Assistance Program with $116 million.
- Increase and expand the Foreign Buyers Tax to other parts of the province
- Increase the property transfer tax on the value of homes over $3 Million
- $306 million for new housing for women, children and homeless people
- $445 million operating funds for affordable rentals
- $308 million for maintenance, seismic and energy performance upgrades for existing units
- Encouraging more rentals with property tax exemptions
- $32 million for other supports
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