In order to bring stability to the exuberantly priced Vancouver housing market, which has may people shut out, the BC NDP has launched a 30-point plan that’s broadly designed to stabilize the market while they pump 6 billion dollars into affordable housing over the next three years.
“It’s a bold move, but many feel that’s what the housing crisis merits in a market that has doubled and tripled in value.
In 2016, the Liberal government introduced a 15 percent tax on homes purchased by foreign investors in Metro Vancouver. The NDP will increase the tax to 20 percent and further apply it to homes located in the Fraser Valley, Okanagan, the Nanaimo Regional District, and Victoria.
In addition, a new speculation tax will be tabled in the fall. Property tax collectors will be scrutinizing both foreign and domestic owners. Levies will be applied against high-income families who do not pay income tax in BC. However, exemptions will exist for the principal residence of BC homeowners, so most won’t be affected.
The rate on new speculation tax will be $5 per $1,000 of assessed value in 2018. And next year, the government plans to increase the rate to $20 per $1,000 of assessed value. It will apply initially to Metro Vancouver, the Fraser Valley, the Victoria area, the Nanaimo Regional District, Kelowna, and West Kelowna.
Between the speculation tax, the ramped-up foreign buyers’ tax, and a new property transfer tax—the BC NDP estimates adding about $750 million to the budget over the next three years.
All these measures are designed to both penalize and discourage those who have been using the BC and Vancouver housing market as a place to park capital.
Although most experts believe that correcting BC’s housing market will require a multi-faceted approach, Finance Minister Carole James is hopeful that the initiatives set forth will help to “moderate” and to “stabilize” house prices.