NDP should scrap its speculation and vacancy tax
In a province that has seen numerous examples of bumbling government policy-making from all political parties over the decades, the NDP’s speculation and vacancy tax is sure growing into one of the better examples.
Launched in the euphoric days after the NDP minority government squeaked into power after 16 years on the opposition benches as a supposedly populist initiative to battle “foreign owners and speculators” allegedly behind high home prices, the tax quickly proved controversial. It was discovered it would primarily target hard-working Canadians who owned second homes in certain areas of B.C.
Even if one accepts the NDP’s ideological justification for the tax — that owners of real estate should be punished with much higher property taxes if they choose to leave their private property vacant, and therefore fail in some newly claimed social duty to make it available for rent — it should be clear that the Horgan government has been making up its tax policy as it goes along.
Finance Minister Carole James had to change the tax rate and what regions would be affected after a public backlash. Parksville, Qualicum Beach, the Gulf Islands, Kent, Hope, Harrison Hot Springs and Bowen Island were dropped from the tax. It now applies to Metro Vancouver, including Abbotsford, Mission and Chilliwack, as well as Greater Victoria, Nanaimo and Kelowna.
But that opposition paled compared to the public uproar this week when it was discovered — apparently by the NDP as well — that in order to figure out which properties should be subject to the tax, bureaucrats had devised a system where the owners of all 1.6 million homes in the affected areas would have to declare they were exempt, mostly because they are Canadians living in their one property. For added fun, the online form looks like it will take up to 20 minutes to complete and must be filled out by multiple owners, mostly married couples. Homeowners also had to receive special codes by mail to go online. What could go wrong?
Dubbed by some as “negative option taxation” — you are sent a tax bill unless you remember to opt out every year — the system was set up to identify just 32,000 properties subject to the tax. A wag might suggest that irritating 98 per cent of property owners to identify two per cent is just good old government efficiency.
But it’s not particularly smart politics, as the NDP is finding out in Nanaimo, where the tax applies and where the government is in a fight for political survival in a critical byelection.
Green party Leader Andrew Weaver, who has been propping up the NDP under a power-sharing agreement, voted for the tax, claiming it was a confidence matter. He says he forced the NDP to make key changes. Despite that, he said this week: “We hate this tax … Now my job is to get the NDP to recognize it’s a stupid tax and get rid of it.”
Since the NDP brought in the tax, as well as other real-estate taxes, the value of expensive homes has fallen a little, but the more affordable properties that most people could potentially afford have increased in price. On Friday, the Goodman Report, 2018 Year-End Review showed that the average Greater Vancouver rent jumped $88 to $1,385 from 2017 to 2018 — the biggest hike in five years. It’s clear the tax is also not helping renters.
The NDP should listen to Weaver and eliminate its “stupid tax.”