VANCOUVER — Finance Minister Carole James is giving some credit to the speculation and vacancy tax for lowering home prices and easing rental vacancies in British Columbia.
James said Thursday she is cautiously optimistic about easing prices in the real estate market after announcing the province collected $115 million from the tax in the 2018-19 fiscal year.
“When you look at the price moderation we’re seeing, we’re certainly seeing a step in the right direction,” said James.
As of July, the average sale price of a home declined by 5.6 per cent this year, she said.
Housing affordability has been a key issue for the NDP since it took power two years ago. James said the speculation tax is part of its $6.5 billion plan to deliver 114,000 affordable homes in a decade.
As of Sept. 3, James said almost 12,000 homeowners were paying the tax. It is applied in communities in and around Victoria and Vancouver, as well as other areas that have had hot housing markets including Kelowna and Nanaimo.
“It is in fact targeting speculators, people living outside of B.C., and it’s also helping to encourage homes to be used to house people,” James said.
The Opposition Liberals questioned the effectiveness of the speculation tax, arguing it has done little to improve vacancy rates and has dampened development in communities.
“We have locally elected mayors telling (Premier) John Horgan that the speculation tax is not working in their communities and that it is reducing the construction of new and affordable homes for families,” finance critic Shirley Bond said in a news release.
James said more than 1.6 million tax declarations have been filed and 99.8 per cent of B.C. residents are exempt from the levy.
A Ministry of Finance official said 17,600 property owners have not yet provided speculation tax declarations.