B.C. Finance Minister throws cold water on real estate speculation tax
While the clamour for action to combat the price of real estate in Metro Vancouver has reached new heights, the man holding the province’s purse strings has thrown cold water on a proposed “speculation tax.”
“You’ve got to be careful about intervening,” said Finance Minister Mike de Jong to reporters at the legislature on Monday. He was asked about the suggestion by Vancouver Mayor Gregor Robertson and developer Bob Rennie that a speculation tax on homes flipped quickly after they are bought would be an effective way of dealing with the situation, but didn’t appear to endorse the idea.
“Those who are expressing a concern, if you really assess what they are seeking, it’s a reduction in the value of homes in Vancouver, and that will have an impact on a lot of families.”
De Jong, much like Premier Christy Clark last week, showed a greater concern for homeowners who could see their equity lowered if a new tax was implemented.
“If property values in Vancouver were to be reduced by, let’s say, 5 per cent, that could easily translate in a reduction of equity of families who own homes in Vancouver of 60, 70, or 80 thousand dollars. You’ve got to be careful about how you use the tools and the levers of taxation, and you have to be clear on what your objectives are,” he said.
His remarks came a day after a rally at the Vancouver Art Gallery for affordable housing. The event was co-organized by Eveline Xia, the Vancouver woman behind the #donthave1million social media campaign, which has capitalized on the emotions many young people have towards the affordability of homes in Metro Vancouver—and the lack of government action on even publicly studying the issue in recent years.
“From the provincial government, I would like them to start looking at the data. Without the data we can’t move forward, we can’t find a solution. We want them to start researching as soon as possible. All these other countries have already gone forward and researched the data, but we haven’t even looked at it,” said Xia.
NDP housing critic and MLA for Vancouver-Point Grey David Eby was not at Sunday’s rally, but argues that additional research is needed.
“This is really serious. Why don’t we measure and get a sense of how big this is in Metro Vancouver? What I’ve been met with is dismissive attitude. It’s incredibly frustrating,” he said.
“This is a huge driver of the economy in Metro Vancouver, and there’s no measurement of it that I can find. The provincial government has the ability to get that information and they choose not to. They are really abdicating their role as government; first of all to inform the public debate on this, which has a risk of running into racism. I really think we need numbers, I think we need facts, and I don’t think we need speculation about speculation.”
Still, while Eby says he supports the idea of speculation tax in principle, he hasn’t seen specific data to suggest it would be the most effective tool.
“Mr. Rennie and Mr. Robertson’s proposal targets short-term speculators. Is that what’s actually driving unaffordability in the city? Quite possibly. They may have information I don’t have. I have’t seen that information,” he said.
Eby says he can understand both sides of the issue as he represents wealthy homeowners in Point Grey and Kitsilano concerned about their equity along with UBC students who one day hope to get in the market.
However, he says even the wealthiest neighbourhoods in his riding support proposals that keep their streets vibrant and liveable.
“They have kids that can’t afford to live in the community they grew up in, and they are as concerned as anybody else about where their children and grandchildren are going to live. Will it be a gated community for the super wealthy, or a diverse community and one that supports local stores and local economy?”
Still, with just three days left before MLAs leave Victoria for the summer, the government doesn’t appear ready to put forward legislation.
“Ideas are welcome, and we’re going to analyze this and other possible approaches, but as I think you heard the premier say, you do have to be cautious,” said De Jong.
“In other jurisdictions, under the guise of trying to regulate property values, all you’ve really seen is governments taking in a lot more revenue, and not having any impact on housing affordability.”