Government puts damper on speculation tax

The provincial government in B.C. stopped short of endorsing a ‘speculation’ tax after it was proposed by Vancouver’s mayor Gregor Robertson, local developer Bob Rennie, and more than 100 protestors.

“Those who are expressing a concern, if you really assess what they are seeking, it’s a reduction in the value of homes in Vancouver, and that will have an impact on a lot of families,” Finance Minister Mike De Jong told reporters earlier this week. “So you’ve got to be careful about intervening.”

The comments come as talks have been building in recent weeks about affordability in Vancouver. As people continue to clamour for homes they can afford, De Jong expressed concern for homeowners, who could see their equity lowered if a new tax was implemented.

“You’ve got to be careful about how you use the tools and the levers of taxation, and you have to be clear on what your objectives are,” he said.

That is something that De Jong, and Premier Christy Clark, are pointing to as key reasons against a move.

Rennie, himself, spoke out against a foreign investment tax but believes more needs to be done about property flippers who are ostensibly driving the housing market to unaffordable and near-record levels.

Nevertheless, political parties are extending the conversation as the NDP’s housing critic chimed in, lamenting the government’s dismissive attitude to what Vancouverites consider a serious issue.

“This is really serious," he said. "Why don’t we measure and get a sense of how big this is in Metro Vancouver? What I’ve been met with is dismissive attitude. It’s incredibly frustrating."

For buyers looking to get into the market, it’s an attractive option, but for investors, the speculation tax doesn’t necessarily breed much confidence.

Peter Kinch, an investor and mortgage broker in Vancouver, is just one of the investors that CREW found disagrees with Rennie's suggestion.

”I’m not certain that speculators and flippers are the real issue," he said. "The market will control the actions.”

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