For better or worse, B.C. is about to find out whether a new speculation will fix the housing problem or wreck the housing market.
Finance Minister Carole James introduced the tax on Tuesday, amidst applause from those desperate for a solution and warnings of doom from out-of-province owners, some mayors and the real-estate industry.
The law would slap an annual tax of up to two per cent of assessed value on residences owned by non-British Columbians who leave the homes vacant all or part of the time. It applies in the five most populous regions, including Greater Victoria.
In a time when housing prices are rising beyond the means of more and more British Columbians and vacancy rates are almost zero, especially in the Lower Mainland and Victoria, anxious eyes look at empty condos and houses. They see not vacation homes, retirement nests or investment properties but “unused inventory.”
Put those places on the market, and more people would be able to find a permanent place to live. Instead of being rented to foreign visitors with the profits going to out-of-province or out-of-country plutocrats, those places would become homes for regular folks.
The prospect of the tax has brought withering complaints from owners who thought they were welcome here and now find they are pariahs, blamed for a massive housing shortage. Some argue the fear is a major factor in the softening of house prices over the past few months.
The tax will certainly have an effect on the market, just not the one it’s intended to have.
