British Columbia’s proposed real estate speculation tax will damage communities and businesses and do little to deal with the housing crisis or reduce homelessness, B.C. mayors said Sept. 12.
“I believe it will be a disaster for our communities,” Langford Mayor Stewart Young said.
The province pitched the tax in its February budget as a method of “tackling speculation, curbing demand, increasing housing supply and improving security for renters.”
The tax will start at 0.5 per cent of 2018 assessed property value and rise to two per cent after that.
The levy would apply to unoccupied or unrented second homes in the regional districts of Metro Vancouver, the Fraser Valley, Victoria and Nanaimo, and the municipalities of Kelowna and West Kelowna.
And, Finance Minister Carole James said Sept. 12, the tax legislation will be presented to the Legislature in October.
“There’s a housing crisis in British Columba,” James said. “The public wants us to address it.
“It’s going ahead.”
James said certain areas were targeted due to low vacancy rates, high unaffordability and labour market challenges.
Victoria has stressed the tax only applies to those who do not pay income taxes in B.C.
In response, on Sept. 12, Union of B.C. Municipalities delegates voted to lobby the provincial government to modify the levy to empower those local governments wishing to collect such a tax and, if they make that choice, mandate that the money be invested in non-market housing.
“The decision should be made locally,” said Oak Bay Mayor Nils Jensen. “This is a constructive attempt to find a middle course.”
And, he warned, people should be wary of taxes imposed to deal with short-term issues.
He pointed to the imposition of Canadian income tax in 1917.
“How did that work out?” he asked.
Kelowna Mayor Colin Basran said the tax would not have the desired outcome of easing the housing crisis.
“What we need is a true speculation tax rather than a tax on vacant homes,” Basran said.
He said more consultation should have taken place before the legislation was drafted.
West Kelowna Mayor Doug Findlater said the tax doesn’t deal with property flipping, a major factor in real estate price increases.
“A true speculation tax would be a tax on capital gains when you go to sell your home,” Findlater said. “It’s a tax on empty homes.”
He said the tax has led to the cancellation of housing projects and is reducing housing.
“It’s curtailing our growth.”