Property owners are receiving declaration forms this month for the B.C. speculation and vacancy tax, but fewer than one out of 100 will actually have to pay. (Black Press Media files)

Property owners are receiving declaration forms this month for the B.C. speculation and vacancy tax, but fewer than one out of 100 will actually have to pay. (Black Press Media files)

B.C. speculation and vacancy tax a big job with small returns

Declaration letters on the way for Nanaimo, Victoria, Kelowna

Every property owner in B.C.’s largest urban regions should receive a declaration letter by the end of February for the speculation and vacancy tax that almost none of them will have to pay.

The B.C. government says more than 99 per cent of owners now qualify for one of the exemptions, mostly because they don’t have a second residence. But they must declare their property status each year to avoid being billed, with payment due by July 1.

It’s the third year for the tax, which took in $88 million last year based on being vacant for at least six months of 2019. That’s about half of the revenue that was projected when the tax was imposed, which the finance ministry says is a sign it is working, as vacant homes are being sold or rented to avoid paying it. About 12,000 owners were forced to pay in the first year.

What does it cost to mail out hundreds of thousands of letters, process the responses and bill for the tax? That information is not available, because finance staff and call centres to handle the work are also dealing with other tax issues as well.

“Cost to administer the SVT program are not broken down on a program-by-program basis,” the finance ministry said in a statement to Black Press Media Feb. 9. “We put the necessary staff in place to ensure property owners have the information and support they need, and that people have access to information in multiple languages to complete declarations, seek tax information and claim exemptions.”

Whatever the cost of administering it, the NDP government’s legislation requires that all of the SVT revenue be spent on rental housing for the regions where it is collected. Finance Minister Selina Robinson has carried on her predecessor Carole James’ position that the tax is not for revenue but to maximize rental stock available. The ministry says the urban rental vacancy rate increased slightly in 2019, but by the second half of 2020, the top three most expensive rents in Canada, after Vancouver and Toronto, were Burnaby, Victoria and Kelowna.

RELATED: Speculation tax doesn’t cool B.C.’s hot housing market

RELATED: Strata condo rental bans lose exemption after 2021

Condo owners are allowed to escape the tax if their strata council doesn’t allow rentals, but that exemption expires after this year. For the 2019 property tax year, 331,520 condo properties in all SVT regions declared for the tax, and 3,603 had an owner who claimed a strata rental restriction as the reason for its vacancy.

The ministry cites Capital Regional District results to show the tax is working. The region had 1,036 property owners who had to pay in 2018, and 22 per cent of those owners claimed a tenancy exemption in 2019, with the formerly vacant unit rented for at least half of the year.

The last places to receive declaration letters this year are West Kelowna, Nanaimo, Lantzville, Sooke and the Capital Regional District around Victoria, with mailing dates set for this week. Vancouver mailings are to go out next week, Feb. 12 to 17, while most people in Abbotsford, Chilliwack and Metro Vancouver suburbs should have received them by now. Kelowna and West Kelowna are the only urban areas outside southwestern B.C. that are subject to the tax, which is based on low urban rental vacancy rates.


@tomfletcherbc
tfletcher@blackpress.ca

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