Before the ink had even dried on the legislation for the new tax on overseas buyers of Vancouver homes, the BC government was promising a host of affordable housing initiatives, to be funded partly by the anticipated additional revenues from the new tax.
As the bill passed unanimously July 28, provincial finance minister Mike de Jong and housing minister Rich Coleman told media (as reported in a widely syndicated Canadian Press story) that a range of affordable housing schemes for low-income earners, first-time buyers and renters will be put into place in the fall – ahead of the provincial election campaign that is expected to be fought largely over housing issues.
De Jong said, “If foreign purchases continue at the pace they’ve been at, it’s a sizable amount of money.”
The bill passed unchanged and without any opposition, despite calls from the real estate industry to amend the retroactive application of the new tax, which has to be paid by all overseas buyers already locked into purchase contracts that close after the August 2 deadline. Industry insiders have also called for an exemption for people who are living in Vancouver on medium-term work permits, but no exemption was made.
Mayor Gregor Robertson issued a statement from his office earlier this week welcoming the new tax and saying that he has long been calling for the provincial government to address housing affordability. He is now urging Victoria to redirect the new revenue towards housing projects in the City of Vancouver and across the province.
“While I’ve called for other regulatory tools – including luxury and speculation taxes – a higher transfer tax on foreign buyers has the potential to address some of the speculation we’re seeing in our housing market, which would be a positive step in easing affordability pressures on residents…
“There’s no one single solution to affordability. Even if we stopped all speculative investment in housing today, we’d still have a near-zero rental vacancy rate, and thousands of people on waiting lists to get off the streets and into housing. I urge the Province to match their efforts to cool the market with a commitment to invest in creating new low and middle income housing in Vancouver and throughout BC. Vancouver is willing to do more than our share, and we continue to offer 20 shovel-ready sites of City-owned land worth $250m to build affordable housing in partnership with the BC and federal governments.”
The mayor also said that it was important to continue the City’s plan to implement a vacant home tax.
“Ultimately, the issue is not who buys, but how housing is being used: people who use housing solely as a means to make money – rather than living and working in Vancouver – should be taxed as such. That’s why legislation to enable the City to bring in an empty homes tax is an important step forward in making the best use of all our housing, provided it is followed up with a commitment by the Province to meaningfully share data with the City.”