BC budget tax hikes deepen fears over stalled housing construction
Summary
British Columbia's 2026 budget introduces tax hikes that could further hinder an already struggling housing construction sector, raising concerns among developers about project viability.
Why It Matters
The article highlights the impact of increased taxation on the housing market in British Columbia, where construction activity is already weak. Understanding these fiscal policies is crucial for stakeholders in the real estate sector, as they could exacerbate the housing supply crisis and affect affordability.
Key Takeaways
- BC's budget raises taxes on high-value properties and professional services, increasing development costs.
- Developers warn that these tax hikes could lead to reduced housing supply and affordability challenges.
- The construction sector is already facing sluggish activity and rising costs, making new taxes particularly burdensome.
- Higher taxes may deter investment and delay housing projects, worsening the supply gap.
- The budget reflects the province's need to manage rising debt while balancing the housing market's needs.
Developers warn new levies could restrict supply just as building momentum faded By Liezel Once 18 Feb. 2026 Share British Columbia’s 2026 budget sharpened tensions between the province and its real estate sector, with fresh housing taxes landing amid already weak construction activity and rising fiscal strain. The fiscal plan increased the Speculation and Vacancy Tax to 4% for foreign owners and untaxed worldwide earners starting in the 2027 tax year, up from 3%, and raised additional school tax rates on residential properties over $3 million beginning in 2027. It also expanded provincial sales tax to professional services including accounting, engineering, architecture and certain commercial real estate commissions, a shift expected to add to soft costs on development projects. “There is unfortunately not a lot to like from either a macroeconomic or housing perspective in this budget,” Brendon Ogmundson, chief economist at the BC Real Estate Association (BCREA), said. “We understand that the province is in a difficult position and needs to raise revenues, but doing so on the back of an already struggling housing sector will ultimately prove to be self-defeating.” Tax changes target high‑value and underused properties BCREA argued that higher school tax rates on development lands, the application of PST to housing‑related professional services and the higher Speculation and Vacancy Tax would raise project costs that developers are likely to pass on to buyers, further chal...