Whereas there is a housing crisis in British Columbia that affects all local governments in varying degrees; And whereas there are limited tools to discourage speculation and encourage development of undeveloped property: Therefore be it resolved that UBCM request the Province of British Columbia to create a new assessment classification for undeveloped residential properties to allow local governments to establish a different tax rate for vacant residential land.
Ministry of Finance The Province has more property classes than most provinces and is not actively considering creating new property classes. For example, Ontario has five and Saskatchewan has four property classes for provincial tax purposes, compared to BCs nine. Government has received many requests for new property classes over the years, including for utility, residential, short-term rental, and commercial properties. Creating new property classes requires additional resources, complicates the tax system, and introduces opportunities for property owners to seek specific classifications to reduce their tax liability. Any new class must be weighed against these downsides. Rather than create a new assessment classification for undeveloped residential properties, the Province has chosen to address the issue of speculation through other tools. The Speculation and Vacancy Tax SVT introduced in February 2018, is designed to prevent housing speculation and help turn vacant and underutilized properties into homes for people who live and work in BC. The SVT currently applies to 59 specified areas, mostly municipalities, in the province. An owner of vacant residential land in an SVT specified area, is liable for the tax unless meeting the exemption criteria, e.g., making reasonable steps to develop the property. A local government interested in the SVT may write to the Minister of Finance to request for inclusion. An independent review report of the SVT released in 2022 recommended a phased and measured approach to expanding the SVT. To select expansion communities, the Province considers a number of factors, including assessed values of residential property, vacancy rates, population, requests for inclusion, proximity to other SVT specified areas, and whether the community is primarily a vacation area. Government is carefully monitoring housing data moving forward to ensure the desired results of the SVT are achieved.