Wednesday, October 17, 2018

Greater Victoria home builders knock down speculation tax



VRBA’s Casey Edge calls speculation tax “dishonest” and ineffective in dealing with housing crisis
The head of a local industry group representing home builders criticizes the New Democratic government’s insistence on going forward with changes designed to improve housing affordability.
Casey Edge, executive director of the Victoria Residential Builders Assocation (VRBA) based in Saanich, is critical of the provincial government’s decision to impose a speculation tax on homes that sit vacant more than half of the year with a focus on urban areas with high housing prices and low rental vacancy rates.
“If the [speculation tax] is passed, housing supply will be undermined and jobs will be lost for the sole purpose of creating another housing tax for the BC government,” he said.
He made these comments after finance minister Carole James said she is moving ahead with the tax despite mayors calling for changes. They include a number of communities from the Greater Victoria, including Saanich and Sidney.
“We’ve seen examples of families being forced to live in tents, workers and seniors living in their cars and professionals leaving this province,” James told the legislature in justifying the tax. “As a result, businesses can’t find the workers they need to keep our economy growing.”
James has stressed that people can avoid the tax by renting out their second residence for half the year or more.
The tax applies to Metro Vancouver (except Lions Bay and Bowen Island), Greater Victoria and the municipalities of Nanaimo, Lantzville, Abbotsford, Chilliwack, Mission, Kelowna and West Kelowna. It will take effect based on 2018 assessed property values, at 0.5 per cent for B.C. residents, one per cent for Canadians whose principal residence is outside B.C., and two per cent for foreign owners and “satellite families” who don’t pay income tax in B.C.
The legislation defines a satellite family is a family that resides in B.C. but reports half or more of its family income outside Canada.
Non-resident Canadians are those who pay income tax in another province.
Edge though called the tax “dishonest.”
The name of the tax name has been changed to the speculation and vacancy tax because the spin-doctoring of the Horgan government did not work on the public, said Edge. “It was always a vacancy tax and the government just couldn’t sell it as a speculation tax,” he said.
Edge also accused of ignoring the real reason for housing demand. An enormous numbers of Canadians are in housing market including the Greater Victoria, yet the provincial government has made regional governance difficult.
“Urban areas intended for housing must be rezoned for density to increase supply and accommodate a large demographic of millennials,” he said. Pointing to Boom, Bust and Echo by David K. Foot, current affordable housing crisis reflects a demographic problem, with baby-boomers born after the Second World War looking to downsize, while millennials (the largest group since the boomers) are looking to get into the market.

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