The Okanagan Mainline Real Estate Board says the province’s plan to tackle affordable housing is misleading.
President Marv Beer says the speculation tax will target homes worth more than $400,000, and even if these homes were rented or sold to avoid the tax, the housing supply created would not be what is generally considered affordable.
Beer (pictured) says the proposed tax would only have a minimal impact on speculators, who buy and ‘flip’ properties for profit, but would hurt long time home owners.
“Speculators, because they don’t hold a property for long, would be minimally affected by this tax. Instead, it would be the long-time home owner who would pay, year over year, for choosing to spend time and money in BC. Ironically, it’s possible that the tax would encourage speculators to set their sights on homes under $400,000, competing with legitimate buyers for lower cost homes. If the government really wanted to go after speculators, it could apply a levy to homes sold within a short time of being purchased.”
Beer says while the government says the tax is aimed at foreigners and out of province owners, he says about two-thirds of 32,000 that would pay the tax are owned by British Columbians.
“The good news is that the government has included a number of exemptions from the tax. The bad news is that the myriad of exemptions would create a costly administrative nightmare and still, housing affordability would not be enhanced nor speculators deterred. While measures to address both problems may be needed, this tax, as it is currently proposed, is not the answer.”
Finance Minister Carole James says the groundbreaking legislation means that British Columbia will have the strongest protections in Canada against people looking to use the housing market as a resting place for both foreign capital and other speculative investments. She says it will also ensure satellite families and people who use local services without paying B.C. income taxes contribute their fair share.
“The speculation and vacancy tax is already moderating the housing market by curbing foreign investment and discouraging the incentive to hold homes as vacant investment properties in B.C.’s major urban markets. According to experts including RBC, the Canadian Real Estate Association and Sotheby’s, the speculation and vacancy tax and other measures introduced by the Province are responsible for helping cool the B.C. market.”
All revenue from the speculation and vacancy tax will be used to fund affordable housing for people who live in B.C.