The British Columbia government introduced legislation on Wednesday that would establish a new home resale tax.
The state says the tax targets speculators and improves the housing supply.
“While people looking for housing are unable to enter the market, wealthy investors are using homes as short-term investments to make a quick profit,” Finance Minister Kathleen Conroy told media after introducing the bill in the British Columbia legislature.
“Buying a home, whether it's a first apartment or a new home for a growing family, is one of life's biggest decisions and milestones. We believe families shouldn't have to compete with speculators when making such an important decision, which is why we're making those seeking profit think twice about reselling.”
2:53 BC introduces home resale tax bill
The proposal, first announced in the 2024 Budget, would see the tax levied on anyone who buys a home and sells it within two years of buying it.
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A 20% tax will be levied on any gains made on a home sold within one year. The tax will decrease the longer you hold the property, reaching zero after two years of ownership. The tax will be retroactive to the 2023-2024 tax year.
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Conroy said he expects the tax would bring in “conservative” revenue of about $40 million and affect about 4,000 sales a year.
“(The tax) will help not only people who are taking advantage of the opportunity to buy their first home, but also homebuilders, who often find it very difficult to actually build homes because by the time they get their hands on them, the properties have been resold so many times,” Housing Minister Ravi Kahalon said.
2:19 BC Budget 2024: New home resale tax to crack down on speculators
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The law also includes exemptions for people facing unavoidable life changes such as death, divorce, relocation or job loss, and for those who increase the housing supply.
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The initiative has the backing of the British Columbia Condominium Homeowners Association, which says real estate speculators often vote against needed repairs, maintenance and increased condominium costs.
“Speculators often create an environment of uncertainty within condominium associations by focusing on unauthorised, unpermitted and hasty renovations, leaving condominium communities with a legacy of construction failures and conflict,” said association spokeswoman Heidi Marshall.
If the bill is passed, it will come into effect in January 2025.
2:03 BC government introduces bill to impose new home resale tax
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