Will a property tax on foreign buyers work?

VANCOUVER (NEWS 1130) – A tax on foreign buyers is one thing, but how do you enforce it?

David Eby is the MLA for Vancouver-Point Grey, home to some of the most expensive properties in the region, so he knows the issue well.

“You can tell it’s summer weather because the BC Liberals have their flip-flops on today.”

While he’s happy to see the Liberal government take action, he wonders how a tax on foreign home buyers would work.

“The problem is going to be enforceability. The concern we have is that they’re going to capture a lot of people who come to Metro Vancouver as skilled workers, they’re paying their taxes here, they want to become citizens here, and now they have an additional 15 per cent tax to pay.”

Eby is not confident it will have much of an impact, pointing out widespread evasion of a similar tax in Australia.

Instead, he is backing a private member’s bill that proposes taxing everyone who buys and own property locally but doesn’t pay their worldwide income tax here.

“It’s a much better measure and we wish they would do it. It’s why it’s been endorsed by 40 economists from SFU and UBC and we hope they’ll still look at it.”

Vancouver’s mayor happy to see action from the province

Vancouver Mayor Gregor Robertson says he agrees with an intervention in the high-end housing market.

“I’ve been calling on the Province for over a year to take bold action on our overheated housing market and address the impacts of unregulated, speculative global capital on local real estate. The year-over-year price gains we’ve seen are not sustainable and put our City’s economy at risk. Today’s legislation is a major acknowledgment by the Province that they have an important role to play in the housing market and affordability is not simply an issue for municipalities to deal with.”

He says the government should have a broad focus and say on the use of a homes or land rather than specific cases.

But he doesn’t know if a foreign buyers tax in Vancouver will have an impact on prices in other parts of the province.

“Ultimately, the issue is not who buys, but how housing is being used: people who use housing solely as a means to make money – rather than living and working in Vancouver – should be taxed as such. That’s why legislation to enable the City to bring in an empty homes tax is an important step forward in making the best use of all our housing, provided it is followed up with a commitment by the Province to meaningfully share data with the City.”