NDP agrees to amendments to speculation tax to secure Green support
'Ultimate success is affordable housing,' says Finance Minister Carole James
The NDP government has reached an agreement with the B.C. Greens to ensure the new speculation and vacancy tax on housing won't be voted down as it moves through the legislative process.
The new tax will apply to vacant or under-ultilized properties in designated regions of B.C., including most parts of Metro Vancouver and the Capital Regional District (excluding the Gulf Islands and several rural electoral districts), along with Abbotsford, Mission, Chilliwack, Kelowna, West Kelowna, Nanaimo and Lantzville.
The Greens had pushed for a clause that will allow affected municipalities to opt out of the tax, at the request of some mayors who feel it will have a negative impact on investment and development in their communities.
That demand was not met by the government. Instead, the legislation introduced earlier this week will be amended to include annual meetings between the finance minister and mayors to assess the impact of the tax.
Finance Minister Carole James said she's open to exempting municipalities in the future if the data shows the tax has had an impact and improved vacancy rates and affordability.
'Key aspects' addressed
Green leader Andrew Weaver says the amended bill is not ideal, but he can live with it.
"The key aspects have been addressed, recognizing that we would have done things differently but we have shared values."
The legislation will also be amended so that all Canadians — regardless of whether they live in B.C. — will pay the same annual tax rate of 0.5 per cent of a vacant home's assessed value.
That's down from the original one per cent rate for those who live outside B.C.
Foreign buyers will still face a two per cent tax on their properties.
Compromises on bill
All funds raised by the tax will also go to affordable housing in the affected communities, under a third amendment to the legislation.
The compromises on the bill are part of working in a minority government, James said.
"Ultimate success is affordable housing. That is what we are both here for. That is what we ran on," she said.
But Liberal leader Andrew Wilkinson said the last-minute deal with the Greens shows the government is making up tax policy on the fly.
Wilkinson also noted the tax will now bring in less revenue to build affordable housing than originally forecast for the government.
"This is just tax policy that's melting away like a snowman in July," he said.