BC Government To Introduce Speculation Tax

In an effort to deal with the ongoing challenges of housing affordability in much of the province, the government of British Columbia announced, as part of its budget on February 20, 2018, its intention to implement a new speculation tax on residential properties (the "Speculation Tax"). This annual tax is to be imposed on owners of residential properties within certain parts of the province. Generally speaking, homes that are not primary residences or that are not being rented out are subject to the tax. However, a tax credit mechanism is also to be introduced to reduce the impact of the tax on persons who report BC income.

The rationale of the law makers is that foreign and domestic speculators who hold vacant properties in major urban centres have contributed to the runaway real estate prices that make it difficult for many British Columbians to afford a home. Further, it is believed that the Speculation Tax will provide an incentive for people who own multiple