Opinion: Eby’s Unsold Condo Tax Punishes the Last People Still Willing to Build Homes You Can Own

This is an opinion piece. It reflects my views as a presale specialist who has worked with Metro Vancouver buyers and developers since 2014.

Three months ago, David Eby stood beside Prime Minister Mark Carney and announced a plan to help finance the purchase of more than 2,200 empty condos across BC. Critics on all sides called it a bailout for developers. Eby said it was not, and that developers would be taking losses.

On September 22, he called a snap election for October 24. Three days later, standing in Burnaby with a condo tower under construction behind him, he announced the opposite approach: a new tax on those same developers.

I understand the politics. I do not understand the policy. And I think the people who will pay for it are not the developers he is aiming at. It is the buyers who come next.

What Eby is actually proposing

Here are the facts before the opinions. According to Daily Hive and The Canadian Press, the BC NDP’s “Unsold Condo Tax” would apply to newly completed strata condos left empty and unsold for more than a year. It would start at 2 percent and rise by 1 percentage point for every additional year a unit stays unsold. The party says it could bring about 5,000 condos into use, citing a September Real Property Data report that values Metro Vancouver’s unsold inventory at roughly $4.4 billion.

He also promised to double the Speculation and Vacancy Tax for domestic owners from 1 to 2 percent, and to raise it to 5 percent for foreign owners.

What the announcement did not include, per Daily Hive: an implementation date, how a unit’s taxable value would be set, any exemptions, or a maximum rate. That is a lot of blanks for a tax that could decide whether a tower gets built.

The premise is wrong

Eby’s pitch is that developers are sitting on finished condos “waiting for prices to go up.” I have been in this market a long time, and that is not what I see.

Nobody holding 300 empty units in Burnaby is waiting for a price spike. They are paying interest on construction loans that were supposed to be paid off at completion. They are paying strata fees, property tax, and insurance on every empty suite. Holding inventory is already the most expensive thing a developer can do. That is exactly why we have seen flash sales, quiet price cuts, and incentives piling up all year. The market is already doing what Eby says he wants. It is just slower than an election calendar.

The units that are stuck are mostly the large, expensive ones. As I wrote in Metro Vancouver’s $4.4 Billion Unsold Condo Problem, three-bedroom condos have the highest unsold rate of any common unit type, and more than 80 percent of unsold units are priced above $1 million. Those units were priced off 2022 land and construction costs. A tax does not change what they cost to build. It only changes who absorbs the loss, and how quickly.

Who would want to build now?

This is the question that matters most, and I cannot find a good answer.

Think about it from a lender’s side. To finance a condo tower in this region, a developer typically needs to presell a large share of the units before the bank releases construction money. The bank then carries risk for three to five years until completion. Eby is now telling every lender in BC that if the market softens at the end of that cycle, the province will add a new and growing annual tax on whatever is left.

A rational lender prices that in. That means tighter presale thresholds, higher rates, or simply saying no. And the projects that were marginal already, which in 2026 is most of them, stop being projects at all.

We are not starting from a healthy place. CMHC’s Fall 2026 Housing Supply Report, as summarized by STOREYS, found that condo apartment starts in Vancouver fell another 40 percent in the first half of this year, the weakest first half since 2011. Rental now makes up about 60 percent of starts. The ownership pipeline is already shrinking. This tax gives the people still willing to build for owners one more reason to stop.

The consequences nobody is talking about

It could hurt the presale buyers who are closing right now. If developers are pushed into fire sales, the first people hurt are buyers in the same building who signed at earlier prices. When comparable units sell at a discount, appraisals at completion can come in low. A low appraisal means the buyer has to bring more cash to close. I expect some of the families this tax is meant to help would feel that squeeze first.

It could push inventory to funds, not first-time buyers. When a developer needs to clear 200 units fast to avoid a tax bill, the quickest buyer is not a young couple waiting on mortgage approval. It is an institutional investor buying in bulk at a discount. The homes get “used,” which checks Eby’s box, but they become rentals owned by funds instead of starter homes owned by families.

It will be priced into every future launch. Developers do not absorb new risks forever. They build them into pro formas. The cost of a possible tax on unsold units shows up as higher prices per square foot at the next launch, or as a project that pivots to purpose-built rental, where this tax does not apply. Either way, the buyer pays.

It adds policy risk to a market that runs on certainty. Presales work because a buyer, a lender, and a developer all agree today on something that will exist in four years. Every surprise tax announced in the middle of that cycle makes the next agreement harder to reach.

What this means for the next generation

For most of my career, a presale condo was how a young person in this region got onto the property ladder. A 10 to 20 percent deposit spread over time, a few years to save, and a home at the end of it. That path is already narrowing. When 60 percent of what gets built is rental, the default future for someone graduating today is renting for life, with a landlord that is increasingly a pension fund or REIT.

I do not think that is the future Eby wants. But I think it is the future this kind of policy produces. You cannot tax the ownership pipeline and expect it to grow.

The case for the tax, in fairness

To be fair, the other side has an argument. Supporters would say 5,000 brand-new homes sitting empty during a housing crisis is indefensible, and that a clear penalty speeds up price discovery that would otherwise drag on for years. Lower prices on existing units do help buyers who can close today. And if the revenue really goes to affordable housing, some people will be better off. I do not dismiss that. I just think it trades a short-term price cut on 5,000 units for fewer units built across the next decade, and that is a bad trade for the people who have not bought yet.

What buyers should do now

Do not panic, and do not assume this becomes law. It is a campaign promise, the election is October 24, and there are no details yet. If you are shopping standing inventory, you already have leverage, and uncertainty may give you a little more. If you are closing on a presale in the next year, talk to your mortgage broker now about what happens if your appraisal comes in below your purchase price. And if you are thinking about a new launch, ask the developer and the lender directly how they are planning for policy risk.

The bottom line

In June, the answer was to help buy developers’ unsold condos. In September, with an election called, the answer is to tax them. Housing policy that changes direction with the campaign calendar is exactly the kind of uncertainty that stops homes from getting built. The buyers who pay for that are the ones who have not entered the market yet.

If you want straight answers on how this and other policy changes affect a specific project you are considering, register for VIP presale access at vancouverdwelling.ca. I will keep tracking what is promised, what gets passed, and what it means for your purchase.