Housing tax measures and funding for BC Build are a major focus of this year's provincial budget.
New and expanded tax measures, as well as investments in the new BC Build program, are among the province's top housing priorities, according to the NDP government budget released Thursday.
Budget 2024 includes a new tax on home flips, an expansion of existing tax measures and funding for the recently announced BC Builds program.
All the measures introduced in Budget 2024 are part of the Housing for People plan, which was a major part of last year's spending.
Last year, British Columbia committed $4.2 billion — the largest three-year housing investment in the province's history — to support affordable housing, build rental units and tackle homelessness.
Aiming for affordability through tax measures
British Columbia's new residential resale tax is similar to the speculation and vacancy tax and is intended to discourage price inflation by investors. It is levied on profits made when selling residential property within two years of purchase. It goes into effect on January 1, 2025.
According to budget documents, the tax rate on properties sold within 365 days of purchase will be 20 percent, then start to fall to zero by the 730th day.
There are exemptions for extenuating circumstances that may motivate you to sell the property within two years, including life changes such as divorce, death, disability, illness, or unemployment.
The revenue generated from this will be used to build more homes across the state.
“The housing crisis is complex. It has been exacerbated by decades of inaction. Governments at all levels have left housing supply to the private market. As governments stepped back and speculators moved in, house prices rose,” Finance Minister Kathleen Conroy said in her Budget speech.
“That's why we're introducing the Home Resale Tax as the latest measure to crack down on bad actors.”
In addition to this new tax measure, British Columbia is expanding its real estate transfer tax laws, including increasing the first-time home buyer program threshold from $500,000 to $835,000 and providing a full real estate transfer tax exemption on the first $500,000, effective April 1, 2024.
“An estimated 14,500 people, double the previous number, will be eligible for first-time homebuyer support to help them get out of the rental market and enable others to get into it,” the Treasury said.
First-time home buyers will receive further support through an increased property transfer tax exemption threshold for new-build homes, which will increase from $750,000 to $1.1 million from 1 April 2024.
Conroy said in his speech that the program was initially designed to provide “financial assistance” to British Columbians but no longer reflects the realities of today's housing market.
Finally, eligible rental-only buildings with four or more units will also be exempt from real estate transfer taxes from January 1, 2025, through December 31, 2030.
“By increasing the real estate transfer tax exemption threshold and encouraging the construction of new rental and residential housing, more people will save more money – an estimated $100 million per year,” the Treasury said.
British Columbia's King's Speech this week said the province's housing policy will introduce protections for renters from “aggressive evictions”, something that was not included in the latest budget.
But when British Columbians file their 2023 income taxes, renters will get up to $400 back through the B.C. Renters Tax Credit.
Building urgently needed housing
Part of the budget relies on tax measures to help people wanting to enter B.C.'s housing market, while other parts support efforts to increase supply.
The fiscal year 2024 budget includes $198 million in new funding for the multi-billion-dollar program, including $150 million in operating funds and $48 million in capital funds.
The program is designed to provide low-cost loans to develop rental properties on land owned by governments, First Nations and nonprofits, with the goal of building housing for what the province calls middle-income earners.
Prime Minister Justin Trudeau visited Vancouver on Tuesday and announced an additional $2 billion in funding for BC Build, on top of what he promised in the budget.
To further support efforts to increase housing supply across British Columbia, $116 million in funding over the next three years will be dedicated to existing programs and services, including accelerating funding to municipalities for digital permitting, short-term rental regulations and development approval frameworks.
“The funding will also maintain 500 permanent and temporary shelter spaces in communities across British Columbia,” the Treasury said.
The province maintains that more than 78,000 homes have already been delivered or are under construction towards the 110,000 homes the NDP promised to build in 2017.
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