As part of its $10.9-billion deficit budget, the provincial government is adding another $318 million towards the BC Builds program in an effort to fast-track new home construction for middle-income earners.
That money will be spent over three years and is in addition to the $198 million initially announced last year, also to be spent over a three-year period.
The 2025-2026 budget anticipates 11 housing projects to begin construction this fiscal year, adding to the six already under construction.
Speculation and Vacancy Tax increases
Foreign owners will see their penalty under the Speculation and Vacancy Tax rise from two to three per cent of the home’s value, while Canadian citizens and permanent residents will see the tax rise from 0.5 per cent to one per cent.
The Ministry of Finance anticipates this will raise an addition $47 million in revenue for the 2027/2028 fiscal year.
“This money will be invested back into housing in the 59 regions where the tax applies,” reads a budget background summary. “It’s one more measure alongside the home-flipping tax and tax for foreign owners to curb price escalations caused by speculators.”
Housing starts down
The budget document summarizes key trends in housing, noting that housing starts last year were down from a record high in 2023 “due to elevated interest rates, skilled-labour shortages and increasing construction costs” but recovered in the fourth quarter.
“Homebuilding increased in Kelowna, Nanaimo and Abbotsford, while decreases occurred in Vancouver and Victoria in 2024 compared to 2023,” it reads.
The ministry is anticipating home sales to increase by 13 per cent this year as demand grows due to interest rates cuts and federal mortgage rule changes, with prices forecast to increase by 2.4 per cent.
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