Opinion: Mass speculation tax mail-out conjures up apparition of affordability

“NDP claims about the impact of taxes on providing an affordable price point is the mirage it has created in the desert for buyers”

The BC NDP government seems to hinge a fair amount of its political success by invidiously comparing those who have some wealth with those it courts and cradles.

The most prosperous these days are the bad people, underpaying or dodging taxes and deserving of a grand reckoning. Bit by bit, tax by tax, the Horgan administration is administering what it considers justice.

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Its greatest conceit is to somehow pair the confiscation of wealth with the rectification of the runaway housing market. Its claims about the impact of taxes on providing an affordable price point is the mirage it has created in the desert for buyers.

It was difficult, for instance, to suppress laughter at the brochure that arrived with the letter last week from the province – the mail-out to capture the one per cent who have second homes and annoy the 99 per cent who have to declare they don’t.

As co-owners, my wife and I each got the letter, which is itself a waste. The government could have saved all of this by sending us one notice – or better still, appending the notice of a proposed tax on the appraised value of the property with the annual notice of the local tax on the appraised value of the property. But that would require coordination, and the year since the announcement has been insufficient by public sector standards.

Apart from the process – akin to the near-fatal “negative option” that a cable company once tried to build its business – the particulars of the government’s claims are ludicrous.

I am hoping the government knows this and is simply lying to us. If it believes what it’s saying, we have bigger problems than the tax.

Some of the honkers in the envelope:

1. The tax, 0.5 per cent this year and two per cent next on the appraised value of eligible homes, will ensure that “people who earn the majority of their income outside B.C. contribute their fair share in taxes.” This is arguable. People who don’t live here are paying property taxes and using almost no government services. They could argue for a rebate.

2. The tax will discourage foreign buyers from using homes for a (gasp) profit, “a practice that has driven the cost of housing way up.” We could have done without the “way” in that sentence. You could say access to record-low interest rates for a decade, a feeble stress test for buyers through much of that period, shortages of the right form of housing supply, or the popularity of our cities as a place to move have also driven prices “way” up. But I suppose it’s easier to vilify who they’re vilifying.

3. The tax will encourage owners to rent or sell empty homes, “so more housing will be available for people who need it.” Maybe, but pretty much only for people with a lot of money, who at last glance were having no particular trouble entering the housing market today.

The brochure then asks: “How will this tax help solve B.C.’s housing affordability crisis?” It could answer: “Not much.” But instead it runs off again a basic batch of non-sequiturs, like:

1. The tax will “target foreign and domestic speculators who own homes in B.C. but don’t pay tax here.” Great, but again, these are not typically people holding low-cost housing. They constitute less than one per cent, the government says, so what possible impact could even total divestiture of those properties have?

2. The tax will “turn empty homes into good housing for people.” Probably great housing, in fact, just not necessarily affordable housing. I do concede one point in the brochure, though: the houses will be for people.

3. The tax will “raise revenue that will go to supporting affordable housing.” This is far more illuminating than the other illusory claims, because really this is just a novel way to pull funds from wealthier pockets to build for those in greater need. In journalism we call this “burying the lede” of a story. Really, the government should have said something like: “We know it’s going to take a lot of money to address our housing crisis. We need to find it from a new source. We want to hit the people who can’t vote against us.” Problem is, not everyone is a foreign owner. Some are angry British Columbians, and even with a rebate up to $2,000, I think they’ll still be unhappy.

The most exaggerative claim comes next, when the province asserts the tax is one measure in its 30-point plan “to return housing affordability to our province.” Sorry, that ship sailed – the reality is in the ocean, not in the desert mirage.

Kirk LaPointe is editor-in-chief of Business in Vancouver and vice-president, editorial, of Glacier Media

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