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

Half million dollars change Langley couple’s life

Richard and Frances Laidlaw contemplate travel and moving

Liberal hopeful aims to claim candidate spot in Langley-Aldergrove

Leon Jensen was the 2015 candidate in Langley-Aldergrove.

LETTER: Fort Langley driver lobbies for roundabout signalling

ICBC rules call for drivers to signal when exiting roundabouts.

South Langley community group wants to talk innovative housing

Brookswood-Fernridge Community Association invites people to a meeting about the future of housing.

GREEN BEAT: Opening ‘new roads’ in Langley makes cycling safer

HUB Langley pushed to ‘UnGap the Map’ and create more bike infrastructure throughout the community.

VIDEO: The ‘most cosmopolitan’ of butterflies could migrate to B.C.

The painted lady butterfly will likely arrive this summer from Southern California

Pedestrian killed, two injured in three-vehicle crash in Coquitlam

Road closures in effect following collision

Is it a homicide? B.C. woman dies in hospital, seven months after being shot

Stepfather think Chilliwack case should now be a homicide, but IHIT has not confirmed anything

Sources say Trudeau rejected Wilson-Raybould’s conservative pick for high court

Wilson-Raybould said Monday “there was no conflict between the PM and myself”

First Nations public art piece stolen in Nanaimo

Spindle Whorl went missing over the weekend, according to Nanaimo RCMP

Father-son duo at B.C. Children’s Hospital helps new dads fight depression

The pair teamed up to introduce the only known research-based mindfulness workshop for new dads

Mexican restaurant in B.C. told to take down Mexican flag

General manager of Primo’s Mexican Grill in White Rock: ‘I’ve never heard of anything like this’

B.C. NDP moves to provide tax credits, tax cut for LNG Canada

Provincial sales tax break of $596 million repayable after construction

COLUMN: Smart phone too powerful a tool to yank from students’ hands

Rather than ban them from schools, let’s teach kids to harness their phone’s power and use it properly

Most Read