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

North Island Mall revitalizes as new stores open

Dirom wants to “create a vibrant new space in the community by working together” with new business.

Three strong earthquakes reported off Vancouver Island

The quakes, all measuring more than 6.0 on the richter scale, were about 260 kilometres west of Tofino

2018 municipal election: Few surprises on Vancouver Island

16 incumbent mayors will continue in their positions for four more years

Mayoral results from across B.C.

Voters in 162 municipalities in B.C. set to elect mayor, council, school board and more

Every vote counts: 10 tightest races in B.C.’s municipal elections

Peachland saw their election decided by just one vote

B.C. sailor surprised by humpback whale playing under her boat

Jodi Klahm-Kozicki said the experience was ‘magical’ near Denman Island

North Island Bantam Eagles win back to back games on the road, finish preseason with perfect record

Coach Ryan Handley’s North Island Bantam Eagles have been having quite the… Continue reading

B.C. government moves to tighten resource industry regulations

New superintendent will oversee engineers, biologists, foresters

Election watchdog seeks digitally savvy specialists to zero in on threats

Move follows troublesome evidence of online Russian interference in the 2016 U.S. election

More court before Dutch man charged in Amanda Todd case is extradited here

Appeals must be dealt with in Europe, before charges faced in B.C.

Crown says man guilty of B.C. girl’s 1978 murder based on alleged confession

Jury hears details of girl’s 1978 murder while Crown says man should be convicted of girl’s murder based on alleged confession.

BCHL alumni has NHL jersey retired by Anaheim Ducks

Paul Kariya played with the Penticton Vees from 1990-1992

Most Read