Budget 2018: Foreign buyers tax, speculation tax introduced to Victoria and Nanaimo
In an effort to ease the region's restrictive real estate market, B.C. will expand the controversial foreign buyers tax to Victoria and Nanaimo and introduce a speculation tax for vacant homes.
In its 2018 budget, the B.C. government announced the foreign buyers tax implemented in Metro Vancouver in 2016 will increase to 20 per cent from 15 per cent. It will also be expanded to the Nanaimo and Capital Regional Districts, the Fraser Valley and Kelowna, effective as of Wednesday.
The province says a new two per cent speculation tax is aimed at people "distorting British Columbia's housing market," by cracking down on foreign and domestic speculators who own vacant homes but don't pay income tax in B.C.
"This is a major step to end speculation in our marketplace. We're asking those who benefited from high prices to give a little bit back," B.C. Finance Minister Carole James said in her budget speech.
Speculation tax is aimed at people who buy BC property but don't pay BC taxes. Will be $60 000 on a 3 million dollar home. Starts tomorrow.— Chandler Grieve (@CTVNewsChandler) February 20, 2018
The province announced it will also counteract the housing crisis by building 114,000 units of affordable housing over the next 10 years.
James also announced what she called a "historic" $1-billion investment in child care that will create more than 22,000 spaces for children throughout the province, reduce costs by up to $1,250 per month for every child, and give up to $350 per month directly to licenced child-care operators to reduce fees by 2020-2021. The child care subsidies will be available to households that make less than $111,000 per year.
Daycare. Households that make less than $111,000 a year will be eligible for subsidies. licensed Daycare providers will also be eligible for up to $350.00 per child.— Chandler Grieve (@CTVNewsChandler) February 20, 2018
Ferry fare freeze
The budget also included some goodies for Vancouver Island residents and those who visit them.
The province said it will make BC Ferries more affordable by introducing a fare freeze on all major routes and reducing fares on non-major routes by 15 per cent.
A seniors passenger fare discount will also be fully restored for Monday-Thursday sailings.
A budget highlight document on the government's website said that ferry fares have "skyrocketed, putting coastal communities at a disadvantage that is costly and unfair."
The government also pledged to eliminate medical service premiums by Jan. 1, 2020, saving $900 in annual fees for individuals and $1,800 annually for families.
MSP will instead be replaced with a payroll tax on employers, while businesses with payrolls of less than $500,000 won't pay any tax.
Meanwhile, B.C.'s Fair PharmaCare program will eliminate deductibles for families with net incomes below $30,000, effective Jan. 1, 2019.
James said the government projects a surplus of $219-million for this fiscal year, with the surplus climbing to $284-million by 2020-2021.