Mayor Gregor Robertson has launched a campaign within his own party to pressure the provincial government to impose a punitive tax on people who flip property in Vancouver and the rest of the province.
In an email Monday to subscribers of Vision Vancouver bulletins, Robertson urged followers to sign a petition to support his efforts to have the government create a “speculation tax.” The mayor said he wants to discourage short-term sales of properties, with the aim of driving down prices.
“The goal is to discourage investors who buy a home just to make a quick buck — who buy it and then, six months later, turn around and sell it again,” he wrote. “That’s not fair to people, especially first-time buyers, who are trying to get into the housing market. It’s especially unfair to young people who are struggling in a surging real estate market.”
The mayor’s email came after he issued a surprise statement Friday in which he announced he supported a speculation tax. The mayor indicated a need for such a tax in a letter last week to Premier Christy Clark, according to staff in the mayor’s office.
Robertson told reporters Monday that he was “looking forward to having some back-and-forth” discussions with the Clark government over imposing a tax, how it would work and who would be penalized. Calling the market “too hot to handle,” the mayor said other cities in the world have imposed taxes to curb real estate speculation.
“Certainly, there is a need for more data to be collected on this,” he said, when asked what evidence he had that speculation was rampant. “At the same time, there’s good tracking on property transfers, the values of properties — on that level of real estate, there’s a lot of activity. How much time people spend in their homes is a lot harder to track.”
During the 2014 election campaign, Robertson was asked about imposing a tax on owners of empty homes. He told the Courier that no “rigorous data” had been collected and he wanted to wait for that research to be done before “we take direct action that might affect the housing supply.”
Robertson said a speculation tax is not aimed at foreign investors, who have been accused of driving up prices, but at “anyone who’s in the market and turning over properties to make a profit.”
The government hasn’t said whether it would enforce a new tax. In an emailed statement from the Ministry of Finance, a spokesman said that while the province recognizes home ownership in B.C. “can be challenging for some people, governments need to be careful that any tax would have the desired effect, without undermining the equity that people may have built up in their homes.”
Robertson announced his desire for a speculation tax the same day that condo marketer Bob Rennie floated the idea in a speech to the Urban Development Institute. Rennie said that if speculation “is a huge negative contributor to affordability, then let’s repatriate some of that money back to our first-time buyers, perhaps in $5,000, $10,000 and $15,000 grants based on length of residency and income.”
He echoed Robertson’s concern that such a tax would be perceived as a tax on foreign investors, which is not the aim of the penalty. Rennie said he hated “the racist undertone that is rampant out there, so a visible, measurable gesture is needed.”
“I am concerned that we will be sending out a message to all our foreign investors from India to Indonesia that if you tax foreign investment on housing on a Monday that you may tax foreign investment on technology on LNG, on manufacturing by Friday,” he said.
In an interview Monday, Rennie said a speculation tax could apply to someone, for example, who put a down payment on a condo that hadn’t been built but was worth $700,000 in the pre-sales phase. Once the condo was built three years later, and the owner was able to find a buyer for $850,000, Rennie suggested a percentage of the gain would be taxable — on top of existing capital gains.
“I’m trying to drop the pebble in the pond to get the discussion going,” he said.
When asked what the public should make of him calling for a speculation tax on the same day that Robertson later issued his support for such a tax, Rennie said he’s the author of his own plan and that it is a provincial issue.
Rennie supported Robertson in his 2014 re-election campaign, hosting a $25,000-a plate lunch to raise money to help the mayor win a third term in office.
Robertson is expected to make more announcements related to housing over the next couple of weeks and council will discuss Tuesday its plans to create more housing for families.
@Howellings
