The British Columbia government has announced a multi-billion dollar plan to tackle the province’s housing crisis by increasing housing availability and affordability.
The ‘Homes for People‘ plan involves a $4 billion investment over three years and $12 billion over the next decade with the goal of building thousands of new homes.
Fighting speculation
The plan includes measures aimed at discouraging speculation through a flipping tax. The government says the tax will make it less profitable for people to buy and sell homes quickly.
“We’ll be designing this tax to ensure that it achieves the goal, which is getting away from people buying a home to hold it for a short period of time and sell it for a higher price, driving costs higher,” Premier David Eby said during a press conference in Victoria, B.C. on Monday.
“If you are holding a home right now that you intend to flip, if you are thinking about buying a home for the purposes of flipping it, the message today is that this tax is coming, it will cost you money, so stop engaging in that activity.”
Brendon Ogmundson, chief economist for the B.C. Real Estate Association shared on social media that while there were some “real positives” in the plan, the flipping tax will likely need “a lot of exemptions given the wide range of reasons people move.”
Speeding up permits and approvals
The government plans to speed up the permitting process to reduce costs and speed up approvals by overhauling municipal zoning rules.
The new plan will allow for more multi-unit homes on single-family lots, and legislation will be introduced next year to allow secondary suites in every community.
Additionally, a three-year pilot program will offer forgivable loans of up to $40,000 for homeowners to build and rent secondary suites if they are willing to rent them below market value for at least five years. The pilot program is expected to be open to at least 3,000 homeowners for the first three years.
The government also promises a renter’s tax credit of up to $400 per year for renters. It will also work with municipalities to crack down on short-term rentals by mandating more data-sharing by platforms, which would help municipalities to better enforce their bylaws.
Legislation is expected later this year.
