British Columbia needs substantially more homes. The Canada Mortgage and Housing Corporation estimates that approximately 610,000 additional homes will be needed in BC by 2035 to restore housing affordability to 2019 levels.

Against that backdrop – and on the campaign trail for the upcoming provincial election – BC Premier and NDP leader David Eby announced two housing tax proposals on Friday, September 25, 2026. He said that if elected, his government will increase the existing Speculation and Vacancy Tax (SVT) and introduce a new tax on unsold strata units.

Both proposals are intended to bring more homes onto the market and improve affordability, but they also raise an important question: Will these measures have a positive impact on housing supply, or will they make new housing more difficult to finance and build?

Increasing the Speculation and Vacancy Tax

The SVT was introduced to discourage housing speculation and encourage owners of vacant properties to make those homes available for long-term rental housing supply. The tax applies in designated areas of BC and is primarily intended to capture foreign owners, domestic owners who do not pay provincial income tax, and “satellite” families that report less than half of their household income on Canadian tax returns.

The 2027 tax rate is set to be four per cent for foreign owners and one per cent for Canadian citizens or permanent residents of Canada. The BC NDP proposal would raise the tax rate to five per cent for foreign owners and two per cent for domestic owners.

A new tax on unsold strata units

Premier Eby also proposed a new tax on completed strata units that remain vacant and unsold for more than one year. The tax would begin at two per cent of a unit’s value and increase by one per cent for every additional year it remains unsold.

The objective is to encourage developers to reduce prices and sell completed units more quickly rather than leave them vacant.

The potential consequences for housing supply

While the objectives of both policies are understandable, there may be unintended consequences on BC’s long-term housing supply. Completed homes do not necessarily remain unsold because developers are deliberately withholding them from the market. Units take longer to sell when demand is weak and buyers are facing affordability constraints. Economic conditions can also change between the start and completion of a project.

BC’s housing market is already facing significant challenges. Provincial home sales in September 2026 were down 4.7 per cent from the previous year, while overall sales activity remains 25 per cent below the ten-year average.

In this tumultuous environment for housing providers, taxing developers for holding completed but unsold homes would add an additional cost to an already challenging landscape. Most of those costs may be passed on to future buyers or reflected in decisions about whether future projects proceed at all.

These proposals also need to be considered within the wider housing taxation framework, which is increasingly complex. Existing measures in BC with overlapping objectives include:

• the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act, commonly known as the Foreign Buyer Ban;
• BC’s additional property transfer tax for foreign entities; and
• the City of Vancouver’s Empty Homes Tax.

Before the introduction of new taxes or increase of existing ones, the BC Real Estate Association (BCREA) would like the next provincial government to assess how these measures interact, whether they are achieving their intended outcomes, and whether the cumulative costs are helping or hindering the delivery of new housing.

BCREA is an independent and non-partisan source of housing information. During the provincial election campaign, BCREA will publish a series of blog posts examining significant housing announcements from the major political parties and assessing their potential effectiveness in improving market-housing affordability.

Authorized by British Columbia Real Estate Association, registered sponsor under the Election Act, 604-683-7702.

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