A real estate speculation tax wouldn’t necessarily help Metro Vancouver’s affordability crisis, B.C.’s finance minister warned Monday.
Vancouver Mayor Gregor Robertson and Bob Rennie, one of the city’s top real estate marketers, have both called for a speculation tax to curb house-flipping, which they blame for pushing up real estate prices in the region.
Finance Minister Mike de Jong said while a speculation tax would put more money in the government’s coffers, it probably wouldn’t do much else.
“In other jurisdictions, under the guise of trying to regulate property values, all you’ve really seen is governments taking in a lot more revenue and not having any impact on housing affordability,” he said.
If a speculation tax were effective in driving down prices, there would still be serious repercussions for homeowners, de Jong added.
“You’ve got to be careful about intervening,” he said. “If property values in Vancouver were to reduce by let’s say five per cent, that could easily translate into a reduction in equity for families that own homes of $60-, $70-, $80,000.”
Public frustration about housing affordability in Vancouver has been growing for years, and a new petition calling for restrictions on foreign ownership has already been signed by almost 25,000 people.
The government has been hesitant to blame rising prices on foreign buyers, but Robertson said it’s high time elected officials stepped in.
The mayor didn’t have data to suggest house-flipping is contributing to the problem, but said gathering that information would be a good start to tackling the problem.
“Certainly there’s a need for more data to be collected on this,” Robertson said.
Critics have argued the government also needs to gather data on foreign ownership so it can develop an accurate sense of what impact the issue is having, if any.
De Jong promised the government will at least look into the idea of a speculation tax, as well as “other possible approaches” to dealing with Metro Vancouver’s housing crisis.
With a report from CTV Vancouver’s Mi-Jung Lee