A vacancy tax does nothing to address the actual issue.
Honestly, for those that don't know, the way houses and condos are being sold in vancouver right now is like this:
A place is listed for an open house. 12-15 buyers + agents show up at the listing WITH OFFERS IN THEIR HANDS, without subjects or clauses, often exceeding the list price of the home by more than 10%.
In our building, we had an original unit sell for $90,000 above list price to purchasers who were viewing the listing from a skype tour on their realtor's phone. This unit was original to the early nineties with no updating.
A small tax is worthless to these buyers, they would happily pay it if it means continuing to shield millions of dollars. It doesn't address affordability for the rest of Vancouver, it simply increases the cost of ownership. It doesn't address the lack of single family dwellings in the city which is driving families out and slowly killing the education board in Vancouver.
It's just a way for the province to add more funds to general revenue to make it look like their tax cuts are working.
Quote:
This year’s budget included an exemption from the property transfer tax as an incentive for construction of new homes up to $750,000 in value. Plus the government is engaged in another data-gathering exercise on the supply side of the equation.
“We see the record numbers of housing starts,” he said “But how many other units have (been) denied? And how many other housing units are awaiting approval? What would the impact be of thousands upon thousands of units actually coming onto the market? I expect it would relieve some of the pressure.”
The government is pursuing answers to all those questions from local governments in the Metro Vancouver. “I hope I don’t have to FOI it,” joked de Jong, riffing on his recent appointment as minister in charge of freedom of information, or FOI.
Once the sought-after information on supply is in hand, he’ll be in a better position to decide how to proceed on the affordability file. But from what he said this week, there’s no doubt about his preferences.
“I don’t believe the answer is to try and artificially constrain demand whether it is from within the country, within the province or internationally. I think the answer is for us to work together as governments and increase supply.”
Not surprising that the Liberals are reluctant to do anything to reduce the proceeds from property sales. The last budget was in surplus mostly because of an almost $600 million windfall from the property transfer tax. They are budgeting for $3.6 billion in returns from the tax over the next three years.
But in political terms, de Jong is seeking to reframe the housing debate as a debate about economics.
The New Democrats emphasize the need to discourage foreign buyers, the Liberals push to increase the housing stock. The party that would decrease demand versus the one that wants to increase supply.
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Did I mention the finance minister happens to have ownership interest in 7 residential properties in the lower mainland...