B.C. premier highlights initiatives to combat speculation, boost housing supply

With just under eight months to go until B.C.'s election, the province's premier touted the NDP government's ongoing initiatives to combat speculation and increase housing availability at a news conference Monday.

Premier David Eby highlighted successes of the province's speculation and vacancy tax, saying it's opened up 20,000 homes for renters. The province has previously said the tax has collected more than $300 million since 2018.

"It used to be the case that if you worked hard, if you followed the rules and you put in your time, you'd be able to afford a good place to live," Eby said at Monday's news conference. "Well that contract was broken with people by governments that neglected to make sure that we were building and delivering housing that the middle class could actually afford."

Eby also discussed the incoming flipping tax, which was announced in the 2024 budget last week. If passed, beginning Jan. 1, 2025, any profits made from the sale of a residential home within two years of buying it will be subject to the tax, with some exceptions.

"We want the revenue from this to be as low as possible because we don't want people to be flipping homes," Eby said. "So if you own a home right now that you're planning on flipping, this is your final warning. This tax is coming."

But some critics say they don't believe the tax will lower housing prices.

”I think the flipping tax is not important at all for long-run affordability, but it may be important to provide political cover because there are some people – maybe lots of people – who don’t want to see their neighbourhood densify and believe that British Columbia is expensive not because of an absence of homes for people looking, but rather because of speculation or various nefarious investment forces,” Tom Davidoff, an associate professor at the University of British Columbia's Sauder School of Business, told CTV News Vancouver.

According to the province, the tax rate will be 20 per cent for income earned from properties sold within the first year, gradually declining to 10 per cent if sold after 18 months, and further reducing to zero after two years of ownership.

'Not a silver bullet'

An owner who turns a house into a duplex or triplex would also be exempt.

“The exemption will be about adding units. It’s not about tweaks to existing numbers of units,” said Eby.

“The flipping tax will also help those home builders to actually be able to buy the property, to build the homes people need, to not have it flipped three, four times before it gets to them,” explained Housing Minister, Ravi Kahlon.

Other exemptions would include losing a job or a divorce.

According to the Finance Ministry, about seven per cent of residential homes were resold within two years between 2020 and 2022,

BC United thinks the tax is more about politics than lowering the cost of housing.

“It looks like there might be about 400 units a year that would have this tax on it which would be negligible,” said West Vancouver-Capilano MLA, Karen Kirkpatrick who is also the BC United housing critic.

Paul Kershaw, a policy professor at UBC's School of Population Health and founder of Generation Squeeze, said he wishes the tax had been brought in 10 or 15 years ago.

“I think it’s an important measure going forward to signal more so than ever we want to reserve the housing for homes more so than investments,” Kershaw said.

“But given that we’re having this flipping tax come in so late in the game, it alone is one part of a broader strategy to try and restore housing affordability,” he explained.

The premier admits the tax alone isn’t the answer to B.C.’s housing problems.

“The flipping tax is not a silver bullet. If it was a silver bullet, it would have been fired a long time ago,” Eby said.

But he does believe it’s a needed part of a plan to tackle housing challenges.

With files from CTV News Vancouver's Alyse Kotyk and Isabella Zavarise