The BC govt has targeted foreign buyers as the cause of rising housing prices, and are increasing the tax to 20% including Greater Victoria. Most recent data indicate foreign purchases in Victoria represent only 4.1% of all sales.
They have also proposed a tax on vacation homes purchased by out-of province Canadians. For example, a Red Deer family’s summer home on Pender Island jumps in tax from $1,800 to $9,000 or double the BC income tax paid by a British Columbian earning $80,000.
According to CMHC CEO Evan Siddall, it may be convenient for politicians to use foreign buyers as a “scapegoat” for rising prices, but it is both factually wrong and divisive.
He says slow and obstructive municipal processes are significant contributors to a lack of supply and affordability.
Housing supply is being choked between the ALR and anti-development municipalities/community groups opposing increased density in urban containment areas intended for housing.
The BC govt has refused to implement responsible regional planning in Greater Victoria, resulting in many communities protecting out-dated concepts of density contributing to high prices. These obstructions to development result is long delays and higher housing costs, if the project is approved at all.
Rather than address obstructions to supply, the BC govt puts the blame squarely on home-buying customers.
Nobody blamed foreign buyers or out-of-province Canadians when housing prices increased $135,000 or 41% from 2003 to 2005 after a period of stagnation.
Historically, prices jump after stagnation, which Victoria experienced prior to 2014.
Not all politicians support a Foreign Buyers Tax. Langford Mayor Stew Young calls it a “modern day head tax.”
Langford has the region’s most progressive, affordable development policies enabling young families to purchase new homes.
The BC govt should accept the fact their failed governance model of self-determination for municipalities must change, and should assist with increasing housing supply to accommodate demand. This will generate more skilled jobs as well as revenue fort govt.
It’s far preferable than looking for scapegoats and taxing BC into a recession.
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