RSS

'Fear and uncertainty': Out-of-province homebuyers could rush to sell if B.C. slaps speculation tax

'It's like Saskatchewan putting (poison) on all their fields'

Thousands of Albertans and Saskatchewanians own properties in the areas B.C. plans to hit with its speculation tax on vacant homes, including the Vancouver area, the Fraser Valley, Victoria, Nanaimo and Kelowna.Postmedia Network

CALGARY – Canadians are not rushing en masse to sell their recreational properties in British Columbia yet, but they’ve stopped looking to purchase vacation homes there amid growing fear of the province’s planned speculation tax.

“We haven’t been besieged by people looking to sell,” LandQuest Realty Corp. president Richard Osborne said of the B.C. NDP government’s proposed 2 per cent tax on the value of any unoccupied home in the more populated parts of B.C.

Still, Osborne said out-of-province homebuyers could rush to sell, depending on what the province legislates. The first reaction among his clients has been “fear and uncertainty”, and fewer are shopping.

Thousands of Albertans and Saskatchewanians own properties in the areas B.C. plans to hit with its speculation tax on vacant homes, including the Vancouver area, the Fraser Valley, Victoria, Nanaimo and Kelowna.

The tax has yet to be introduced in the legislature but the province described the need to “stabilize B.C.’s out-of-control real estate and rental market” marked by “distorted markets, sky-high prices and empty homes” in its throne speech last month.

The government expects the tax will apply to 15,000 residential properties. Anyone who owns a home but doesn’t live in B.C. and doesn’t rent it out would be subject to the speculation tax, which is one of several measures the province has proposed to make housing more affordable in parts of B.C. and especially the Lower Mainland.

“It’s clearly not a speculation tax,” Osborne said of the tax, which would also hit his own vacation property. A true speculation tax, he said, would apply to people that profit from flipping houses in short periods of time and should specifically target profits from short-term buyers and sellers.

Whether the proposed tax will effectively make houses more affordable in places like metro Vancouver, where the average price of a bungalow was $1.4 million at the end of 2017, according to Royal Lepage, depends on who is granted exemptions, University of British Columbia’s associate professor of economics Joshua Gottlieb said. He thinks any exemptions should be limited to specific groups, like retirees, rather than broad groups, like Canadians outside B.C.

Gottlieb was one of dozens of economists and business professors at UBC to endorse a similar proposal, called the B.C. Housing Affordability Fund, which would have taxed vacant homes and directed the funds to affordable housing projects or to reduce income taxes.

“We have punitively high taxes on labour income, which have now gotten worse with the new 2 per cent payroll tax for businesses above $500,000, that create a disincentive to work. At the same time, we have extremely low property taxes by North American standards,” Gottlieb said.

“The system is basically asking for an economy that is obsessed with real estate ownership and not productive work,” he said, adding, “I think we should tilt the tax system to tax property more because property doesn’t respond.”

Labour income, he said, is elastic and so would respond to a drop in taxes.

However, Osborne and others in the real-estate industry believe property values will be negatively impacted by the tax. “They’re going to create a bigger problem,” he said, adding the new tax could lead to a rush of sales, depressing property values and potentially leading to foreclosures as people’s mortgages are larger than the value of their homes.

B.C.’s tourism and real-estate industries – as well as successive governments – have spent years marketing the province as a place to visit, to enjoy and to retire.

Osborne said the new tax has instantly damaged that reputation and will impact business at wineries, salmon fishing outfits and ski resorts. “It’s like Saskatchewan putting (poison) on all their fields,” he said.

• Email: gmorgan@nationalpost.com | Twitter:
Read

Please visit our Open House at 137 663 Beckett CRES in Saskatoon.
Open House on Sunday, March 4, 2018 1:00PM - 2:30PM Fabulous location two storey townhouse in Aspen Grove on Beckett Crescent, tucked away in a quiet private corner of Arbor Creek with only residence traffic. This great corner unit has 3 bedrooms on the second level with a 4pc bath, the main floor has a large living room, a bright spacious kitchen, 2pc bath and patio doors to a private patio. The basement is partially developed needing only carpet to complete the family room and it has roughed in plumbing for a 4pc bath. Features include: White kitchen cabinets, central air, central vac and appliances. One designated parking stall in front of unit. Quick possession available.
Fabulous location two storey townhouse in Aspen Grove on Beckett Crescent, tucked away in a quiet private corner of Arbor Creek with only residence traffic. This great corner unit has 3 bedrooms on the second level with a 4pc bath, the main floor has a large living room, a bright spacious kitchen, 2pc bath and patio doors to a private patio. The basement is partially developed needing only carpet to complete the family room and it has roughed in plumbing for a 4pc bath. Features include: White kitchen cabinets, central air, central vac and appliances. One designated parking stall in front of unit. Quick possession available.
Read
Categories:   Aberdeen Rm No. 373 Real Estate | Aberdeen, Saskatoon NE Real Estate | Adelaide/Churchill, Saskatoon Area 02 Real Estate | Arbor Creek, Saskatoon Area 01 Real Estate | Arbor Creek, Saskatoon Real Estate | Avalon, Saskatoon Area 02 Real Estate | Avalon, Saskatoon Real Estate | Battleford Real Estate | Big River, Prince Albert NW Real Estate | Blairmore, Saskatoon Real Estate | Blucher Rm No. 343 Real Estate | Borden Real Estate | Borden, Saskatoon NW Real Estate | Briarwood, Saskatoon Area 01 Real Estate | Briarwood, Saskatoon Real Estate | Buena Vista, Saskatoon Area 02 Real Estate | Candle Lake | Candle Lake, Prince Albert NE Real Estate | Canwood Rm No. 494 Real Estate | Caswell Hill, Saskatoon Area 04 Real Estate | Caswell Hill, Saskatoon Real Estate | Central Business District, Saskatoon Area 03 Real Estate | City Park, Saskatoon Area 03 Real Estate | City Park, Saskatoon Real Estate | Confederation Park, Saskatoon Area 05 Real Estate | Corman Park Rm No. 344 Real Estate | Dalmeny Real Estate | Dalmeny, Saskatoon NW Real Estate | Delisle, Saskatoon SW Real Estate | Dundonald, Saskatoon Real Estate | Dundurn, Saskatoon SE Real Estate | East College Park, Saskatoon Area 01 Real Estate | East College Park, Saskatoon Real Estate | Eastview, Saskatoon Area 02 Real Estate | Erindale, Saskatoon Area 01 Real Estate | Erindale, Saskatoon Real Estate | Evergreen, Saskatoon Area 01 Real Estate | Evergreen, Saskatoon Real Estate | Exhibition, Saskatoon Area 02 Real Estate | Fairhaven, Saskatoon Area 05 Real Estate | Fairhaven, Saskatoon Real Estate | Forest Grove, Saskatoon Area 01 Real Estate | Forest Grove, Saskatoon Real Estate | Furdale Real Estate | Grandora | Great Bend Rm No. 405 Real Estate | Greystone Heights, Saskatoon Area 02 Real Estate | Greystone Heights, Saskatoon Real Estate | Gruenthal Real Estate | Hafford, The Battlefords SE Real Estate | Hague Real Estate | Hampton Village, Saskatoon Real Estate | Hanley Real Estate | Haultain, Saskatoon Real Estate | Holliston, Saskatoon Area 02 Real Estate | Hudson Bay Park, Saskatoon Real Estate | Humboldt Real Estate | Kelsey/Woodlawn, Saskatoon Area 03 Real Estate | Kenaston, Saskatoon SE Real Estate | Kensington, Saskatoon Real Estate | Laird Rm No. 404 Real Estate | Lakeview, Saskatoon Area 01 Real Estate | Langham, Saskatoon NW Real Estate | Lawson Heights, Saskatoon Area 03 Real Estate | Lawson Heights, Saskatoon Real Estate | Martensville | Martensville Real Estate | Martensville, Saskatoon NW Real Estate | Massey Place, Saskatoon Area 05 Real Estate | Massey Place, Saskatoon Real Estate | Mayfair, Saskatoon Area 04 Real Estate | Mayfair, Saskatoon Real Estate | Meadow Green, Saskatoon Area 04 Real Estate | Mount Royal, Saskatoon Area 04 Real Estate | Neuanlage Real Estate | North Park | North Park, Saskatoon Area 03 Real Estate | North Park, Saskatoon Real Estate | Nutana Park, Saskatoon Area 02 Real Estate | Nutana S.C. | Nutana S.C., Saskatoon Area 02 Real Estate | Nutana S.C., Saskatoon Real Estate | Nutana, Saskatoon Area 02 Real Estate | Osler Real Estate | Osler, Saskatoon NW Real Estate | Pacific Heights, Saskatoon Area 05 Real Estate | Parkridge SA, Saskatoon Real Estate | Perdue | Pike Lake, Saskatoon SW Real Estate | Playa Del Carmen Real Estate | Pleasant Hill, Saskatoon Area 04 Real Estate | Pleasant Hill, Saskatoon Real Estate | Prince Albert NE Real Estate | Queen Elizabeth, Saskatoon Real Estate | Radisson, Saskatoon NW Real Estate | River Heights SA, Saskatoon Real Estate | River Heights, Saskatoon Area 03 Real Estate | Riversdale, Saskatoon Real Estate | Rosewood, Saskatoon Area 01 Real Estate | Saskatoon Area 01 (Other), Saskatoon Area 01 Real Estate | Saskatoon Area 01 Real Estate | Saskatoon Area 02 Real Estate | Saskatoon Area 03 Real Estate | Saskatoon Area 04 (Other) | Saskatoon Area 04 Real Estate | Saskatoon NW (Other) | Saskatoon NW (Other), Saskatoon NW Real Estate | Saskatoon NW Real Estate | Saskatoon Real Estate | Saskatoon SW Real Estate | Silverspring, Saskatoon Real Estate | Silverwood Heights | Silverwood Heights, Saskatoon Area 03 Real Estate | Silverwood Heights, Saskatoon Real Estate | Stonebridge, Saskatoon Area 02 Real Estate | Stonebridge, Saskatoon Real Estate | Struthers Lake Real Estate | Sutherland, Saskatoon Area 01 Real Estate | The Battlefords SE (Other), The Battlefords SE Real Estate | The Willows, Saskatoon Real Estate | Tulum Real Estate | Turtle Lake, The Battlefords NW Real Estate | University Heights, Saskatoon Area 01 Real Estate | University Heights, Saskatoon Real Estate | Vanscoy, Saskatoon SW Real Estate | Varsity View, Saskatoon Area 02 Real Estate | Varsity View, Saskatoon Real Estate | Wakaw, Saskatoon NE Real Estate | Warman Real Estate | Warman, Saskatoon NW Real Estate | West College Park, Saskatoon Area 01 Real Estate | Westmount, Saskatoon Area 04 Real Estate | Westview Heights, Saskatoon Area 05 Real Estate | Westview Heights, Saskatoon Real Estate | Wildwood, Saskatoon Area 01 Real Estate | Wildwood, Saskatoon Real Estate | Willowgrove | Willowgrove, Saskatoon Area 01 Real Estate
Categories
The Saskatchewan REALTORS® Association (SRA) IDX Reciprocity listings are displayed in accordance with SRA's MLS® Data Access Agreement and are copyright of the Saskatchewan REALTORS® Association (SRA).
The above information is from sources deemed reliable but should not be relied upon without independent verification. The information presented here is for general interest only, no guarantees apply.
Trademarks are owned and controlled by the Canadian Real Estate Association (CREA). Used under license.
MLS® System data of the Saskatchewan REALTORS® Association (SRA) displayed on this site is refreshed every 2 hours.