B.C. Liberal leader Andrew Wilkinson says the B.C. NDP’s proposed tax on vacant homes is really targeting assets. (Hansard TV)

B.C. VIEWS: Speculation tax, cabin tax or asset tax?

Targeting empty homes seems confused and ineffective

Taking ideas from Metro Vancouver and trying to apply them around the province is a risky business, as B.C.’s urban-focused NDP government is finding out.

They’re trying to live up to their election rhetoric about solving the urban housing shortage by managing supply and demand. Step one is deploying modular housing, mostly in an effort to get a growing population of urban drug addicts out of tent camps.

Their grand election promise to get more than 100,000 new residential units constructed remains far off. It is apparently based on a long-held NDP myth that the government builds housing. It doesn’t, except perhaps for the glorified shelter spaces that proliferated under the previous B.C. government and continue to be rolled out today.

In general, property developers and the construction industry build housing, if they can ever get approval from local governments to do so. And in those urban areas with the highest housing costs and lowest rental vacancy rates, the construction industry and skilled trades are already flat out building more to meet the demand.

In 2016, the B.C. Liberal government brought in a 15-per-cent additional property transfer tax for foreign buyers of real estate. It was restricted to Metro Vancouver, where mostly in Vancouver and Richmond, Asian buyers were snapping up new condos and high-end houses, pushing real estate beyond the reach of B.C. residents working middle-class jobs. That tax led to a short-term slowdown of prices.

Vancouver city council added their own “empty homes tax,” primarily to target Asian investors parking their capital in downtown condos. This is the model for the B.C. NDP’s “speculation tax,” announced in February by Finance Minister Carole James and set to take effect by next year.

The idea is to force owners of vacant residences to put them on the long-term rental market, based on the assumption that they are real estate speculators. It will be extended to high-demand urban areas, Metro Vancouver, the regional districts of Fraser Valley, Greater Victoria and Nanaimo, plus the municipalities of Kelowna and West Kelowna.

James has been dealing with the fallout ever since. Opposition critics have taken to calling it the “cabin tax,” landing on owners of vacation homes who don’t know how often they have to occupy them to avoid the tax.

Nanaimo regional district and West Kelowna were first to demand to get out of this scheme. They argue that new construction investment will simply move down the road across the arbitrary borders to avoid the tax.

Both B.C. Liberal leader Andrew Wilkinson and B.C. Green leader Andrew Weaver are livid. Weaver’s wealthy constituents with Gulf Islands getaways are not amused. Others want to know why Whistler was exempted, but not Parksville. James has put off clarifying the status of vacation homes until later this spring.

Wilkinson sees a darker motive.

“What the NDP have done is called a speculation tax what is really an asset tax,” Wilkinson said March 7. “What they want to do is slowly chip away at people’s equity in their homes. They’re saying for now it’s secondary homes, but not sure if it’s applying to foreigners only, not sure if it’s applying to Albertans.”

Finance ministry officials quickly poured cold water on my news report suggesting Albertans might get a break on their Qualicum Beach or Okanagan retreats. If anyone gets protected, it will be B.C. taxpayers with second homes.

Once you get beyond the glass towers of Yaletown, this idea that governments can increase housing supply by force starts to look shakier by the day.

Tom Fletcher is B.C. legislature reporter and columnist for Black Press. Email: tfletcher@blackpress.ca


@tomfletcherbc
tfletcher@blackpress.ca

Like us on Facebook and follow us on Twitter.

Just Posted

Mid-Vancouver Island air quality risk very high

Residents of the mid-Island area went to bed last night and awoke… Continue reading

Rogers ‘enhances’ wireless in Qualicum Beach

Announcement part of a multi-year national network plan

‘Beauty amongst such tragedy:’ B.C. photographer captures nature’s trifecta

David Luggi’s photo from a beach in Fraser Lake shows Shovel Lake wildfire, Big Dipper and an aurora

Blue Tie Campaign set to tee off Aug. 25

Annual event is fundraiser for the Island Prostate Centre

Vancouver Island woman to attempt historic swim across Juan de Fuca Strait today

Ultra-marathon swimmer Susan Simmons to attempt to swim from Victoria to Port Angeles and back

Suspect in Spiderman suit steals camera on Vancouver Island

Suspect in red and blue “onesie” caught on surveillance footage breaking into truck in Nanaimo

B.C. team stays alive in Little League World Series after another nail-biter

Surrey-based squad scored a 6-4 win over Mexico reps in Williamsport on Monday

Zeballos wildfire not getting any closer to town – BC Wildfire Service

Authorities optimistic about Zeballos; choppers grounded due to heavy smoke

Kids, seniors at risk as smoke from distant fires hangs over parts of B.C.

B.C. Centre for Disease Control says children’s lungs don’t fully develop until about age 10

B.C. mother charged in 7-year-old daughter’s death appears in court

The 36-year-old mother, of Langley’s Aaliyah Rosa, has been charged with second-degree murder

VIDEO: Teen soccer phenomenon Alphonso Davies to visit B.C. kids camp

The 17-year-old Vancouver Whitecap player is one of the youngest players in MLS history

New plan to lift more than two million people past the poverty line

Anti-poverty strategy will aim for 50 per cent cut in low-income rates: source

Liberals scrap lottery system for reuniting immigrants with their parents

Lottery for parent sponsorship to be replaced, more applications to be accepted

Most Read